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.

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.

To enter data from your Form 1099-Q in the TaxAct program, go to our Form 1099-Q - Entering Payments from Qualified Education Programs FAQ.

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