Drake Tax – 1099-Q: Payments from Qualified Education Programs

Last Updated: November 02, 2026

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.

QTP/ESA taxable distributions (screen 5329)

Drake Tax automatically calculates the taxable income from Qualified Tuition Program (QTP) and Coverdell Education Savings Account (ESA) distributions. The calculated amount flows to the following places in the tax return:

• Schedule 1 (Form 1040), line 8, “Other income” (in current software, the specific line may be 8q or 8z depending on the type of account; see Option 1 above for prior-year line numbers)
• Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, line 5, “Distributions included in income from a Coverdell ESA, a QTP, or an ABLE account”

Enter qualified education expenses and contributions to and distributions from a QTP or ESA in the QTP/ESA Taxable Distributions section of screen 5329. Screen 5329 is accessible from the Adjustment tab of the Data Entry Menu.

The program uses information entered in these fields to calculate the taxable portion of distributions and to generate the calculated amounts on the return. The table below shows which fields are required to ensure correct calculations.

Along with the automatic calculation, the program produces a Coverdell ESA Distribution and Basis Worksheet (Wks QTP_ESA) that shows how the taxable amount was calculated. This worksheet can be viewed using the All Forms, Sets, and Miscellaneous tabs of View/Print mode.

The penalty calculated on Form 5329 includes any amount that is income from a Coverdell ESA or QTP.

For Coverdell ESA and ABLE account information on screen 5329 (including Part V contributions and other Form 5329 scenarios), see Drake Tax – 5329 – Common Scenarios and Questions (KB 13788).

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