I am using TaxAct software. I took a distribution from a 529 which I used for my son's college tuition. Based on all my other input I am receiving the American Opportunity Education credit of $5000 for my 2 kids in college. The 529 1099-G shows earnings of $495. For some reason, the software is forcing me to have to report the $495 as income. Why is this the situation. My understanding of the 529 is that all of the distribution should be tax-free.
- posted
14 years ago