Instructions for Filling Out Form 1099-Q

This document offers a comprehensive guide by the IRS on completing Form 1099-Q, covering specific instructions for each section and general filing procedures. Form 1099-Q is used to report payments from qualified education programs under sections 529 and 530 of the Internal Revenue Code.

In this article, we'll provide information on Form 1099-Q and a step-by-step guide on how to fill it out.

What is Form 1099-Q?

Form 1099-Q is a tax form used to report distributions made from qualified education programs, such as qualified tuition programs (QTPs) and Coverdell education savings accounts (ESAs). The purpose of this form is to report distributions made directly to the designated beneficiary, to an eligible educational institution for the benefit of the designated beneficiary, or to the beneficiary upon death or disability. Key components of Form 1099-Q include the payer's name and TIN, the recipient's name and TIN, the account number, the gross distribution, the earnings, the basis, the trustee-to-trustee transfer checkbox, and the distribution codes.

Who Must File Form 1099-Q?

Form 1099-Q needs to be filed by an officer or an employee, or the designee of an officer or employee, who has control of a program established by a state or eligible educational institution and made a distribution from a qualified tuition program (QTP). Additionally, a trustee of a Coverdell education savings account (ESA) must file Form 1099-Q to report distributions made from Coverdell ESAs.

Form 1099-Q Tax Filing Deadlines and Due Dates

• Due date for furnishing statements to recipients: January 31
• Due date for filing with the IRS: February 28 (paper filing) or March 31 (electronic filing)
• Due date for filing Form 8809, Application for Extension of Time to File Information Returns: February 28 (paper filing) or March 31 (electronic filing)

Form 1099-Q Late Payment Penalty

Although there is no specific late payment penalty amount, it is important to adhere to the due dates for furnishing statements to recipients and filing with the IRS. Failure to meet these deadlines may result in penalties, as is the case with other tax forms. To avoid potential penalties, ensure that you file Form 1099-Q and any required extensions on time.

Step-by-Step Instructions for Form 1099-Q

The step-by-step instructions for filling out Form 1099-Q are as follows:

1. File Form 1099-Q if you are an officer or an employee, or the designee of an officer or employee, having control of a program established by a state or eligible educational institution and made a distribution from a qualified tuition program (QTP).
2. Furnish a copy of Form 1099-Q or an acceptable substitute statement to each recipient.
3. For the payer's/trustee's name and TIN, enter the name and EIN of the QTP.
4. List the designated beneficiary as the recipient only if the distribution is made directly to the designated beneficiary, or to an eligible educational institution for the benefit of the designated beneficiary.
5. The account number is required if you have multiple accounts for a recipient for whom you are filing more than one Form 1099-Q.
6. Gross distributions from a QTP, whether in cash or in-kind, include amounts for tuition credits or certificates, payment vouchers, tuition waivers, or other similar items.
7. To determine the earnings or (loss) on the gross distribution reported in box 1, use the earnings ratio described in Proposed Regulations section 1.529-3, Notice 2001-81, and Notice 2016-13.
8. For QTPs and Coverdell ESAs, if you can determine basis, enter in box 3 the basis included in the gross distribution reported in box 1.
9. Check the appropriate box if the distribution was made directly (trustee-to-trustee transfer) from one QTP to another, or from a QTP to an ABLE account.
10. Check the appropriate box if the recipient is not the designated beneficiary under a QTP or a Coverdell ESA.
11. Include one of the distribution codes in the blank box below boxes 5 and 6 if applicable.

How to Submit Form 1099-Q

To submit Form 1099-Q, you can fill it out online at IRS.gov/Form1099Q and send Copy B to the recipient. When filing with the IRS, follow the applicable procedures if you are required to file electronically. If you are qualified to file on paper, print the black‐and‐white Copy A with Form 1096 from the IRS website and send it in.

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