Contents -

Form 1099-Q

NOTE

ANY INSTRUCTIONS CONTAINED HEREIN ARE ADVISORY ONLY.

REFER TO IRS INSTRUCTIONS FOR OFFICIAL INFORMATION.



Form 1099-Q - Payments From Qualified Education Programs (Under Sections 529 and 530)

File Form 1099-Q if you are an officer or an employee, or the designee of an officer or employee, having control of a program established by a state or eligible educational institution and made a distribution from a qualified tuition program.  A trustee of a Coverdell education savings account
(ESA) must file Form 1099-Q to report distributions made from Coverdell ESAs.

Account number (Required)
Enter any number assigned by the payer to the payee that can be used by the IRS to distinguish between information returns.  This number must be unique for each information return.  The account number is critical in the correction process, especially when more than one information return is filed for a payee.  MAG-FILER will automatically assign an account number if the field is blank.

TIN # (Required)
Enter the payee's valid 9-digit Taxpayer Identification Number (SSN or EIN, as appropriate).  Leave this field blank if the TIN# is unknown.   Any form filed containing an invalid identification number in this entry may be returned for correction.

SSN  (else EIN) (Required)
Check this box if the payee TIN # is a Social Security Number (SSN) of an individual.  Leave this box blank if the payee TIN # is an Employer Identification Number (EIN) of a business or an organization.

NOTE: Imbedded blanks, extraneous words, titles, and special characters ( i.e., Mr., Mrs., Dr., period [.], apostrophe [ ' ] should be removed from Payee Name Lines.  An ampersand (&) and a dash (- ) are the only acceptable special characters.  A comma ( , ) between last name and first name that is placed by MAG-FILER is also acceptable.

Name (Required)
Enter the name of the recipient belonging to the Taxpayer Identification Number (TIN).  If the TIN, is an SSN, enter as last name suffix, first, middle initial, e.g., Doe Jr., John A.).  If the TIN is an EIN, the name is entered as is.  Use the Second Name Field if additional space is required.

Second Name Field
If the payee name requires more space than is available in the name field, ENTER ONLY THE REMAINING PORTION OF THE NAME IN THIS ENTRY.  If there are multiple payees, this field may be used for those payees' names.  DO NOT USE THIS FIELD FOR ADDRESS INFORMATION. 

Address (Required)
Enter the payee's mailing address.  The address MUST be present.  This entry must not contain any data other than the payee's mailing address.

City (Required)
Enter the payee's city.   Do not enter state and zip code information in this entry.

State (Required)
Enter the abbreviation for the payee's state or foreign country.  You must use valid U.S. Postal Service state abbreviations for U.S. addresses.

Zip (Required)
Enter the payee's valid 9-digit zip code assigned by the U.S. Postal Service.

Gross Distribution
Gross distributions, from a qualified tuition program, whether in cash or in kind, include tuition credits or certificates, payment vouchers, tuition waivers, or other similar items.  Gross distributions also include a refund to the account owner, to the designated beneficiary, or to the designated beneficiary upon death or disability.

Gross distributions from a Coverdell ESA include a refund, a payment upon death or disability, or a withdrawal of excess contributions plus earnings.

Earnings
Use the earnings ratio described in Proposed Regulations section 1.529-3 and Notice 2001-81 to determine the earnings (or loss) on the gross distribution. Enter the earnings in this field.  If there is a loss and this is not the final year for distributions from the account or there are no earnings, enter zero in this box.  To print a 0 in the gross proceeds field, enter 0 in the amount field and enter PRINTZERO in the Special Field.
Enter a loss in this box only if this is the final year for distributions from the account.  Any earnings are not subject to backup withholding.

If you are reporting a distribution from a Coverdell ESA that includes a returned contribution plus earnings, you should file two Forms 1099-Q - one to report the returned contribution plus earnings, the other to report the distribution of the other part of the account.
 
You should file a separate Form 1099-Q for any trustee-to-trustee transfer.

For Coverdell ESAs, if you are not reporting earnings, see IRS instructions for 1099-Q for further information.

Basis
Enter the basis included in the gross distribution reported in the Gross Distribution field.  The amount in this field must equal the amount in the Gross Distribution field minus the amount in the Earnings field.

For Coverdell ESAs, if you are not reporting earnings, see IRS instructions for 1099-Q for further information.

Trustee-to-Trustee Transfer
Check this box if the distribution was made directly (trustee-to-trustee transfer) from one qualified tuition program to another.  For a Coverdell ESA, check this box if the distribution was made directly to another Coverdell ESA or a qualified tuition program.

In a Trustee-to-Trustee transfer between qualified education programs, the distributing program must provide you a statement reporting the earnings portion of the distribution within 30 days of the distribution or by January 10th, whichever is earlier.  You must properly account for this in computing the earnings or (loss) reported in the earnings field and the basis reporting in the basis field.

Private/State/Coverdell ESA Checkbox
Check the "Private" box to indicate the distribution is from a qualified tuition program established by one or more private eligible educational institutions or check the "State" box to indicate the distribution is from a qualified tuition program established by a state.  Otherwise, check the "Coverdell ESA" box.

Not Designated Beneficiary Checkbox
Check the box if the recipient is not the designated beneficiary under a qualified tuition program or a Coverdell ESA (see section 529(e)(1)).

FMV
If earnings and basis are not reported, leave these amount fields blank.  Instead, trustees must report the fair market value (FMV) of the account as the end of the year.  Report the FMV in this field.  The description of  FMV and the amount will print in the box below the checkboxes on the payee's form.  Information in this field will print to the IRS file in the special area.

Distribution code:
For 2007, you may, but are not required, to include one of the following distribution codes used to identify the distribution : 1-distributions; 2-excess contributions plus earnings taxable in 2007; 3-excess contributions plus earnings taxable in 2006; 4-disability; 5-death; 6-prohibited transaction.  The description of Distribution code and the code will print in the box below the checkboxes on the payee's form and will also print to the IRS file in the special area.

Special
This area may be used to record information for state or local government reporting or for the filer's own purposes.  This information will be sent to the IRS file and does not print to the form.

Select Print
Check this box to select specific payees for printing.

Corrected Return
Check this box if this entry is a corrected return.  This is only used IF YOU HAVE ALREADY SUBMITTED MAGNETIC MEDIA FILING and wish to print or file corrected returns.  NOTE: The same account number reported on the original must also be on the corrected record.