DEFINITION of 'Form 1099-Q'

An IRS form that an individual who receives distributions from a Coverdell Education Savings Account (ESA) or 529 plan receives from his or her respective investment company. The form is used by the individual to fill out both federal and state tax returns.

BREAKING DOWN 'Form 1099-Q'

Specifically, this form will identify the amount in gross distributions that has been made from the account over the year being reported. These gross distributions are then compared to the educational expenses that have been incurred over the year. If the gross distributions exceed qualified education expenses, then the excess is taxable. However, if the expenses are greater than the distributions, the individual may use the subsequent excess toward an education tax credit.

RELATED TERMS
  1. Non-Qualified Distribution

    1) A distribution from a Roth IRA that occurs before the Roth ...
  2. Form 1099-R

    An Internal Revenue Service (IRS) form with which an individual ...
  3. Distribution In Kind

    A payment made in the form of securities or other property, rather ...
  4. Distribution

    1. When trading volume is higher than that of the previous day ...
  5. Lifetime Learning Credit

    A provision of the U.S. federal income tax code that lets parents ...
  6. Lump-Sum Distribution

    A one-time payment for the entire amount due, rather than breaking ...
Related Articles
  1. Financial Advisor

    Why Coverdell ESAs May Trump 529 Plans

    Coverdell ESAs still trail 529 plans in popularity by a wide margin due to their low contribution limits. But these accounts can be a viable alternative.
  2. Retirement

    Retirement Plan Tax Form 5329: When To File

    Read this if you've taken early distributions or owe excess-contribution or excess-accumulation penalties.
  3. Managing Wealth

    Education Savings Account Tutorial

    This comprehensive guide goes through what an Education Savings Plan is and how to set one up, contribute to it and withdraw from it.
  4. Retirement

    Don't Forget The Kids: Save For Their Education And Retirement

    Retirement and education financing are the two most important planning items for taxpayers.
  5. Personal Finance

    Save for College With a 529 or Coverdell ESA Plan

    Two options for saving for college are the 529 plan and the Coverdell Education Savings Plan.
RELATED FAQS
  1. What is the best way to save for private school expenses? A 529 plan, a Coverdell ...

    If the goal is to put the money in the plan towards private school expenses, then the Coverdell Education Savings Account ... Read Answer >>
  2. Can I contribute to both a 529 plan and a Coverdell education savings account?

    You can contribute to both, and when your child is ready to attend college, as colleges do accept payments from both. There ... Read Answer >>
  3. A parent would choose to set up a Coverdell Education Savings Account for a child ...

    A parent would choose to set up a Coverdell Education Savings Account for a child in order to save for college expenses AND: ... Read Answer >>
Trading Center