1099Q, does it show up on my return?

If you used the money for non-qualified purposes, then you have to add a portion of it as Other Income and also pay a 10% penalty (on some line near total Tax on page 2). Qualified purposes are tutition, books, room and board, etc. See the publication for more details.

As I said, I used it for tuition. Does it get entered on my tax return anywhere?

Nope.

ChEAr$, Harlan Lunsford, EA n LA

Don't make the mistake of taking money out in late 2007 to pay for 2008 tuition, then a portion of the earnings *are* subject to tax and penalty for 2007.

-Mark Bole

Oops, I *did* make this mistake! My son's spring 2008 tuition was due the first week of January so I requested a withdrawal from the 529 account in late December to make sure it got to the college on time.

However, I did pay his 2008 tuition, room and board in late December 2007, so can't I count those amounts as "qualified higher education expenses for

Correct.

Where is this rule? I could not find it in

Are you saying correct to paragraph 1 or 2?

One thing is clear: any education-related benefits, whether QTP distributions, Hope or Lifetime Learning Credit, or Tuition and Fees deduction, will only be available in 2007 for payments made in 2007.

All of the above except QTP specifically state in Pub 970 that payments used for tax benefits in 2007 must be made for an academic period beginning in 2007 or the first three months of 2008. In other words, you can't pre-pay several years' worth of tuition and get a benefit all in one year. However Pub 970 is conspicuously silent on this item when it comes to QTP distributions.

(side observation: this is conspicuously similar to the ability to use HSA distributions to pay for medical expenses incurred many years in the past...)

My comment in particular was meant: don't take money out of the QTP in late 2007 because you know you will have a bill coming up in 2008 (for example, you'd rather make one convenient "estimated" withdrawal than several exact-number withdrawals). The amount of earnings you took out in 2007 that you didn't actually use to pay qualified expenses until

-Mark Bole