529 plan tax documents: Form 1099-Q and the records that keep it tax-free

A qualified tuition program is the IRS name for a 529 plan, a state or school savings account for education (IRS Topic no. 313). Putting money in creates no federal tax form, since contributions are not deductible on the federal return (IRS Topic no. 313). Paperwork starts when money comes out.

You should get a Form 1099-Q from each plan that made a payout (IRS Topic no. 313). Box 1 shows the gross payout, split into earnings in Box 2 and basis in Box 3 (IRS Topic no. 313). For payouts made in 2025, the form should arrive by February 2, 2026 (IRS Publication 970).

The name on the form depends on who was paid. The plan lists the student as the recipient only when the money went to the student or the school (Form 1099-Q instructions). If the check went to the parent who owns the account, the parent gets the form. So ask the plan for the payout confirmations too.

A withdrawal is tax-free when it pays qualified costs. If it is larger than those costs, part of the earnings becomes taxable (IRS Topic no. 313). That is why the receipts matter more than the form itself.

For college, the list covers tuition, fees, books, supplies and required equipment (IRS Publication 970). A computer, software or internet service also counts if the student mainly uses it while enrolled (IRS Publication 970). Keep the store receipt with the date, so it lines up with a term of study.

Room and board is a qualified cost only while the beneficiary carries at least a half-time course load (IRS Publication 970). The amount is capped at the school’s housing allowance in its cost of attendance, or the actual charge for school-run housing if that is higher (IRS Publication 970). So an off-campus lease needs the school’s allowance figure next to it.

• Apprenticeships: fees, books, supplies and equipment for a program registered with the Secretary of Labor (IRS Topic no. 313).
• Student loans: principal or interest for the student or a sibling, up to $10,000 lifetime per person; interest paid this way cannot also take the student loan interest deduction (IRS Topic no. 313).
• Credentials: certain postsecondary credentialing costs count for payouts made after July 4, 2025 (26 U.S.C. 529).

The plan can also pay for kindergarten through grade 12 at a public, private or religious school (IRS Topic no. 313). Beyond tuition, the IRS list now includes curriculum materials, books, outside tutoring, standardized test fees and certain therapies for students with disabilities (IRS Topic no. 313). That wider list applies to payouts made after July 4, 2025 (26 U.S.C. 529).

These costs share one yearly cap per student across all plans. The cap is $10,000 for 2025 and $20,000 for tax years beginning after December 31, 2025 (26 U.S.C. 529). If two grandparents each run a plan for the same child, add both plans together.

For tutoring, keep the tutor’s invoice with the dates and subject. For therapy, keep the provider’s bill showing a licensed or accredited practitioner, such as a speech therapist. These are the records the IRS rules hinge on.

The Form 1098-T from the college shows tuition and the scholarships it handled. It does not show the plan payout. The preparer uses it to split costs between the plan and an education credit.

You cannot use the same costs to figure a tax-free 529 payout and the American opportunity credit (IRS Publication 970). In practice, the preparer often sets aside some tuition for the credit and has the plan cover the rest, such as housing and books. Clear records per cost make that split possible.

Tax-free scholarships and grants lower the costs the plan can cover. In IRS terms, adjusted qualified education expenses are the costs left after that cut, and each payout is tested against them (IRS Publication 970). Send every award letter, not just the 1098-T.

Schools refund money when a student drops a class. If the refund came from costs paid by the plan, the student can put it back into a 529 within 60 days to avoid tax (IRS Publication 970). Keep the refund notice and the deposit record, with both dates.

A college savings plan can now roll into the student’s Roth IRA, with limits. The move must be a direct trustee-to-trustee transfer from an account open at least 15 years (IRS Topic no. 313). It is capped by the yearly Roth limit and by $35,000 over a lifetime (IRS Topic no. 313). It also cannot exceed what was contributed, with its earnings, before the 5-year period ending on the transfer date (IRS Topic no. 313). Keep the account opening statement, the contribution history by date and the transfer confirmation.

Large gifts into a plan have a filing rule. For 2025, if you put more than $19,000 into a 529 for one person, you can spread up to $95,000 over five years on Form 709 (Form 709 instructions). The annual exclusion stays at $19,000 for 2026 (Rev. Proc. 2025-32). Your state may also give a deduction for contributions, so keep the yearly contribution statement.

• IRS Topic no. 313: Contributions are not deductible; Form 1099-Q boxes 1 to 3; qualified K-12 costs, apprenticeships, $10,000 lifetime for loans and no student loan interest deduction for that interest; Roth rollover rules with the 15-year, $35,000 and 5-year contribution limits.
• IRS Publication 970: Form 1099-Q due by February 2, 2026; room and board for half-time students, capped at the cost-of-attendance allowance; computers; no double benefit with the American opportunity credit; recontribution within 60 days.
• Form 1099-Q instructions: The designated beneficiary is listed as the recipient only if the distribution is made to the beneficiary or the school.
• Form 709 instructions: For 2025, a contribution over $19,000 to a 529 for one person may be treated as made over 5 years, up to $95,000.
• 26 U.S.C. 529: K-12 cap of $10,000, raised to $20,000 for taxable years beginning after December 31, 2025 (P.L. 119-21 § 70413(b)); expanded K-12 expenses and postsecondary credentialing expenses apply to distributions after July 4, 2025 (§§ 70413(a), 70414).
• Rev. Proc. 2025-32: For calendar year 2026, the annual gift exclusion is $19,000.