<p>My child received money from a state 529 plan and also has scholarships. The 1099-Q form for the 529 plan has 7000 gross dist, 5000 earnings and 2000 basis. The 1098-T form for the scholarships has 15000 in scholarships, 8000 qualified expenses. Do I add the 5000 earnings and 15000 scholarships for total income and then deduct qualified expenses. Can R&B and books be deducted from the 529 plan?</p>
<p>For your last question about qualified expenses for a 529, check Chapter 9 of IRS Publication 970:</p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf</a></p>
<p>As for the first part of your post, I’m not sure what you’re asking. Are you talking about filing your taxes (e.g., what part of scholarships are taxable; education credits)? If so, you’d be best off looking at the publication above, as well as the IRS instructions for forms 1040 and 8863. Page 68 of Publication 970 has a useful discussion about coordinating a 529 with an American Opportunity Credit.</p>