What is an IRS Form 1099-Q?

1. What is a 1099-Q Form used for?

Form 1099-Q is an IRS tax fax form used to report the distributions from qualified education programs, including Coverdell Education savings accounts (ESAs) and 529 plans. This form is issued to the individual who receives distributions from these educational programs.

Depending on how the account holder spends the money, distributions can be taxable. Depending on the withdrawals made, the information on Form 1099-Q must be reported to the IRS and
state agencies.

As an example, let’s assume that a parent set up a Coverdell ESA plan for their child one year ago. When the child uses the distributions from the Coverdell ESA plan towards their college tuition/expenses, they will receive a copy of Form 1099-K from the account administrator.

2. Who Must File a 1099-Q?

Generally, the administrator or employee who handles and manages the educational plans (Coverdell ESAs and 549 Plans) is responsible for filling Form 1099-Q with the IRS and sending a copy to the beneficiary who receives the distribution.

If the distribution was not made to the beneficiary(Student) or directly to the educational institute(schools, colleges) for the benefit of the beneficiary, the Form 1099-Q should be sent to the account owner who receives the distribution.

The beneficiary uses Form 1099-Q to review the distribution received from the qualified
education program.

Distributions aren’t taxable if the distribution doesn’t exceed the amount qualified for the student's expenses. The beneficiary doesn’t need to report the amount in their tax return.

Distributions are taxable if the distribution amount exceeds the amount qualified for the student's expenses. The beneficiary needs to report the amount in their tax return.

3. When is the Form 1099-Q Due?

The administrator should send Form 1099-Q to the beneficiary for any year the beneficiary takes the distribution.

The deadline for sending a recipient copy of Form 1099-Q to the beneficiary falls on
January 31, 2025.

The deadline to mail a paper copy of Form 1099-Q to the IRS is February 28, 2025.

The deadline to e-file Form 1099-Q with the IRS is March 31, 2025.