1099-Q/529 Withdrawal Question - Can Parent Amend Taxes to Claim Me as Dependent When I Received 1098-T?

This is actually a common situation with 529 plans and scholarship funds. Let me address both questions: For question 1, since the 1099-Q has your mom's SSN, she is the one who needs to report it on her tax return. However, if the funds were used for qualified education expenses (which include room and board), she won't owe taxes on the earnings portion. When she files, she doesn't need to specifically "show" how the money was used - she just needs to be able to document it if asked. She should keep receipts for your housing payments and the university's published cost of attendance. For question 2, this gets a bit tricky. The IRS could potentially question the combined amounts exceeding the published room and board costs. Your suggestion about allocating expenses across academic years rather than calendar years is actually reasonable - the IRS recognizes that academic years and tax years don't align perfectly. You could document that some of the scholarship money went toward January-June 2024 housing while the 529 funds were used for the 2024-2025 academic year housing. And yes, you can absolutely allocate some of the scholarship money toward required equipment like laptops and supplies. Keep all receipts for these purchases to document they were education-related. Any remaining scholarship money that exceeds your qualified education expenses would be reported as taxable income on your return.

I went through this exact same nightmare last year with my daughter's 529 plan and scholarship money. It was honestly making my head spin until I found this service called taxr.ai (https://taxr.ai) that really helped me sort it all out. They have this feature where they analyze education documents like 1098-Ts and 1099-Qs and tell you exactly how to allocate everything properly. What I liked was that they showed me how to properly document the qualified education expenses across different academic periods versus tax years, which sounds exactly like what you need. They actually saved me from making a costly mistake on how I was allocating her housing expenses between scholarship funds and 529 withdrawals.

Just wanted to follow up - I tried taxr.ai after seeing this thread and it was incredibly helpful for our situation with my daughter's 529 and excess scholarship funds. The service walked me through exactly how to allocate the expenses between tax years and academic years, which was the part that was confusing me the most. They also helped me understand how to properly document everything in case we ever get questioned by the IRS. I feel way more confident about our tax filing now. Definitely worth checking out if you're dealing with education expenses and trying to minimize the taxable portion of scholarships.

I had a similar issue last year trying to straighten out my son's 529 withdrawals. I spent HOURS trying to get through to someone at the IRS who could actually answer my questions. It was absolutely maddening! After getting nowhere for weeks, I found this service called Claimyr (https://claimyr.com) - they got me connected to an actual IRS agent in about 15 minutes after I'd been trying for days on my own. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed exactly how to handle the allocation between tax years vs. academic years and gave me specific guidance on documentation we needed to keep. Saved me so much stress and potentially expensive mistakes!

I have to eat my words from earlier. After continuing to struggle getting through to the IRS about my own education credit questions, I broke down and tried the Claimyr service mentioned above. I was connected to an IRS representative in about 20 minutes after spending literal days trying on my own. The agent clarified exactly how I should handle my 1098-T and excess scholarship situation, and even explained how to document everything properly. They confirmed I could allocate expenses across academic periods rather than strictly by calendar year, which is exactly what I needed to know. Honestly wish I'd known about this service months ago instead of stressing about this.

One thing to keep in mind that nobody's mentioned yet - if your mom claims you as a dependent, you can't claim education credits like the American Opportunity Credit yourself. That would go on her return instead. But if you're filing independently, you could claim that credit yourself which is worth up to $2,500. Make sure you and your parents coordinate on this - I've seen families accidentally leave thousands of dollars on the table by not figuring out who should claim what.

Just sharing my experience - I had a similar situation with my 529 and excess scholarship. My financial aid office was actually super helpful in providing a detailed breakdown of expenses by semester rather than calendar year. This documentation was crucial when I had to justify the allocation to different periods. Also, don't forget that off-campus housing is limited to the amount listed in the school's cost of attendance. If your actual rent is higher than what the school lists as the official room and board estimate, you can only count up to the school's published amount as a qualified expense.

One important thing nobody's mentioned - the IRS doesn't actually receive details about how 529 withdrawals were spent! They just get notified that a withdrawal happened. It's up to you to track and allocate qualified expenses properly. As long as you have sufficient qualified education expenses to cover both your tax-free scholarship amount and the 529 withdrawal, you'll be fine. Just be ready to prove it if asked. I've been through an audit specifically on education expenses and having well-organized receipts for everything made it go smoothly.

This is exactly the kind of complex situation that trips up so many students and parents! A few additional points to consider: First, regarding the dependent status question - even if your mom can claim you as a dependent (which depends on the support test, not just the 1099-Q), you might want to run the numbers both ways. Sometimes the family saves more money overall if the student files independently and claims their own education credits, especially given your mom's income level. Second, for the 529 withdrawal timing issue you mentioned - the IRS generally allows reasonable allocation across academic periods. Since you're graduating in spring 2025, you could potentially allocate some expenses to the 2024-2025 academic year that spans across two tax years. Just make sure your total qualified expenses don't exceed what's realistic for your situation. One thing that might help: create a detailed spreadsheet showing all your qualified expenses by semester/academic period, including tuition, required fees, books, supplies, and room/board up to the school's published amounts. This will help you see exactly how much scholarship money and 529 funds you can allocate to each period while staying within the limits. Also, keep copies of your lease agreement, utility bills, and any other housing-related expenses as documentation. The key is being able to show the IRS that your allocations are reasonable and well-documented if you're ever questioned.