Form 1099-Q Checklist – (2024) Tax Year
Purpose and Scope
Form 1099-Q reports distributions from Section 529 qualified tuition programs and Section 530 Coverdell education savings accounts. Payers must separately report earnings and basis for QTP distributions during the 2024 tax year. CESA reporting permits optional fair market value notation instead of itemized earnings and basis split under certain conditions outlined in the current Publication 970.
Payer and Recipient Information Requirements
You must verify the payer or trustee TIN and provide a complete mailing address on all copies of Form 1099-Q. The address should include the city or town, state or province, country if applicable, and ZIP or foreign postal code.
When reporting QTPs, enter the name and EIN of the qualified tuition program as the payer. State-established programs that use the state's EIN require the state name on the first line and the program name on the second line. In the case of Coverdell ESAs, enter the trustee's name and EIN. The recipient's complete TIN must be entered, which may be an SSN, ITIN, ATIN, or EIN, depending on the recipient type.
Filers may truncate the recipient's TIN on payee statements furnished to recipients by replacing the first five digits with asterisks or Xs. Truncation is permitted but not required on Copy B and other recipient copies. You may never truncate the recipient's TIN on Copy A filed with the IRS, and you may never truncate the payer or trustee TIN on any copy of the form.
Distribution Reporting and Box Completion
Report the gross distribution in Box 1 as the sum of earnings shown in Box 2 and basis shown in Box 3 for all QTP distributions. For CESA distributions in 2024, payers may elect to report the aggregate fair market value as of December 31 in Box 7 instead of itemizing earnings and basis.
You must label this amount as FMV when using this optional reporting method. Leave Boxes 2 and 3 blank when reporting CESA distributions using the fair market value method. Complete Box 2 to show the earnings portion of the gross distribution.
Amounts distributed for qualified education expenses, transferred trustee-to-trustee within 60 days, or rolled over to an ABLE account qualify as nontaxable rollovers. QTP-to-ABLE rollovers have been permitted since 2018 under Section 529A and should be reported using the appropriate transfer checkbox.
Calculate basis in Box 3 using current-year cumulative contribution records for QTPs and Coverdell ESAs. Payers must maintain separate accounting for contributions made before and after each calendar year to prevent basis double-counting across multiple statements. The amount in Box 3 must equal Box 1 minus Box 2 when you report earnings and basis.
Transfer Types and Distribution Categories
Check Box 4a if the distribution was made directly as a trustee-to-trustee transfer from one QTP to another, from a QTP to an ABLE account, from one Coverdell ESA to another, or from a Coverdell ESA to a QTP. Check Box 4b if the distribution was transferred directly from a QTP to a Roth IRA maintained for the benefit of the QTP beneficiary. These checkboxes were updated for the 2024 tax year to accommodate new rollover provisions.
Complete Box 5 by selecting one of three designations: Qualified tuition program—Private for distributions from private educational institution plans, Qualified tuition program—State for distributions from state-established plans, or Coverdell ESA for distributions from Coverdell education savings accounts. The 2024 form preserves all three designations without consolidation or removal of any option.
Check Box 6 if the recipient is not the designated beneficiary under the QTP or Coverdell ESA as defined in Section 529(e)(1). Recipients who are not designated beneficiaries should consult Publication 970 and Form 5329 instructions for potential additional tax consequences and loss deduction eligibility.
Taxable Distribution Indicators
Flag Box 2 earnings as taxable if a QTP distribution involved more than one transfer or rollover within any 12 months respecting the same beneficiary. Earnings become taxable when the designated beneficiary changes to a non-family member under QTP rules. The 12-month window applies strictly with no carve-outs for partial-year changes.
Mark CESA distributions in Box 2 as taxable if the designated beneficiary changed to a non-family member or if the new beneficiary exceeds age 30. The age 30 threshold remains unchanged for 2024 with no inflation adjustment. Beneficiaries with disabilities remain exempt from the age 30 restriction under current law.
Distribution Codes and Special Reporting
Payers may optionally report distribution codes in Box 7 using codes 1 through 6 to identify the type of distribution. Code 1 applies to distributions, including transfers to recipients and direct payments to qualified educational facilities. Code 2 indicates excess contributions plus earnings taxable in the current year, and Code 3 indicates excess contributions plus earnings taxable in a prior year.
Code 4 marks distributions made after the recipient became disabled, and Code 5 identifies payments to a decedent's beneficiary, including an estate. Code 6 applies to prohibited transactions and refers to sections 408(e)(2) and 408(e)(4) for rules that apply to Coverdell ESAs.
Filing and Furnishing Requirements
File Form 1096 as a transmittal summary with all paper copies of Form 1099-Q submitted to the IRS. Form 1096 is required only for paper-filed information return batches and is not used for electronic filing, and the 2024 instructions reaffirm this requirement with no change from prior year practice.
Furnish Copy B to each recipient by January 31, 2025, as this due date aligns with the standard information return timeline for the 2024 tax year. The IRS grants no extension absent published relief for specific circumstances or disasters.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
