Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.
03-10-2018 08:10 AM - edited 03-10-2018 08:11 AM
Does my daughter file with her return or do we file as her parents on our return? Yes, she is still a dependent but did have a small W2 paycheck.
03-13-2018 05:04 PM
According to the tax rules, if any portion of the distribution amount from either an education savings account (ESA) or a qualified tuition plan (QTP) was not spent for education purposes, then the taxable portion of the earnings shown on the Form 1099-Q is reported on the tax return.
If this 1099-Q was for an ESA, then the taxable part of the earnings gets reported on the designated beneficiary's tax return, which is the child in this case.
If the 1099-Q was for a QTP, then the taxable part of the earnings would go on the tax return of the owner of the QTP, which can be the parents' tax return in this case. However, it can go on the child's tax return if the 1099-Q distribution was paid directly to the child or paid to an eligible institution, such as the college or university, for the benefit of the child.
Tax Research Specialist