Coverdell ESA Distributions or Qualified Tuition Programs (QTP)

Qualified Tuition Programs (QTPs) are different from Coverdell Education Savings Accounts (ESAs). QTPs include state (529 plans) and private plans. With QTPs, ownership remains with the contributor rather than passing to the designated beneficiary.

In other words, a taxpayer can own the QTP, have distributions made to them, and report Form 1099-Q Payments From Qualified Education Programs (Under Sections 529 and 530) data on their own return, even though the distribution was for the benefit of a dependent.

Distributions from Coverdell ESAs on Form 1099-Q should be reported on the designated beneficiary's tax return.

To enter data from your Form 1099-Q:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Education in the Federal Quick Q&A Topics menu to expand, then click Education program payments (Form 1099-Q).
  3. Click + Add Form 1099-Q to create a new copy of the form or click Edit to review a form already created.
  4. Continue with the interview process to enter all of the appropriate information.

You may want to refer to IRS Publication 970 Tax Benefits for Education or IRS Instructions for Form 1099-Q for further information on Coverdell ESAs.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.