Where to enter data for a 1099-Q, Payments from Qualified Education Programs

This might be entered on screen 5329, Additional Taxes on Qualified Plans, and possibly also on screen 3. There are two options detailed below.

Option 1

Complete Part II – Education and ABLE Accounts on screen 5329. The software will compute the amount of distribution that is taxable.

If there is a taxable distribution, the taxable amount flows to Form 5329 line 5 and to:

• Schedule 1, line 8q or 8z (depending on the type of account) in Drake22 and future.

• Schedule 1, line 8z in Drake 21.

• Schedule 1, line 8 in Drake19 and Drake20.

• Schedule 1, line 21 in Drake18.

• Form 1040, line 21 in Drake17 and prior.

The “additional tax” on the amount flows to:

• Schedule 2, line 8 in Drake21 and future.

• Schedule 2, line 6 in Drake19 and Drake20.

• Schedule 4, line 59 in Drake18.

• Form 1040, line 59 in Drake17 and prior.

Otherwise, Form 5329 is not produced automatically. You can choose to Force 5329 on the bottom right of the 5329 screen.

Option 2

Manually compute the taxable distribution, if any, and enter it directly on both:

• screen 5329, line 5, and

• screen 3, line 8q or 8z (depending on the type of account)

  • line 8z in Drake21

  • line 8 in Drake19 and Drake20

  • line 21 in Drake18 and prior).

The 5329 entry flows to Form 5329, line 5 and the software figures any “additional tax” which will then flow to:

• Schedule 2, line 8 in Drake21 and future.

• Schedule 2, line 6 in Drake19 and Drake20.

• Schedule 4, line 59 in Drake18.

• Form 1040, line 59 in Drake17 and prior.

The entry on screen 3 flows to:

• Schedule 1, line 8q or 8z in Drake22 and future.

• Schedule 1, line 8z in Drake 21.

• Schedule 1, line 8 in Drake19 and Drake20.

• Schedule 1, line 21 in Drake18.

• Form 1040, line 21 in Drake17 and prior.

For more information about the computation of the taxable amount, please see Publication 970 and the Instructions for Form 1099-Q.