Instructions for Recipient
Note: Nontaxable distributions from Coverdell education savings accounts (CESAs)
under section 530, and qualified tuition programs (QTPs) under section 529,
including rollovers, are not required to be reported on your income tax return. You
must determine the taxability of any distribution. See Pub. 970 for more information.
Recipient's taxpayer identification no. (TIN). For your protection, this form
may show only the last four digits of your TIN (SSN, ITIN, ATIN, or EIN).
However, the payer or trustee has reported your complete TIN to the IRS.
Account number. May show an account or other unique number the payer has
assigned to distinguish your account.
Box 1. Shows the gross distribution (including in-kind distributions) paid to you
this year from a QTP or a CESA. This amount is the total of the amounts shown
in box 2 and box 3. See Pub. 970 for more information.
Caution: For CESA distributions (other than earnings on excess contributions)
made during 2018, the payer/trustee is not required to report amounts in boxes
2 and 3. Instead, the payer/trustee may report the fair market value of the CESA
as of December 31, 2018, in the blank box below boxes 5 and 6. To figure your
earnings and basis, use the Coverdell ESA—Taxable Distributions and Basis
worksheet in Pub. 970.
Box 2. Shows the earnings part of the gross distribution shown in box 1. Generally,
amounts distributed that are used to pay for qualified education expenses,
transferred between trustees, or rolled over to another qualified education program
within 60 days, are not included in income. Report taxable amounts as “Other
Income” on Form 1040. Also see Form 5329 and its separate instructions.
Under a QTP, the amount in box 2 is included in income if there has been
(a) more than one transfer or rollover within any 12-month period with respect
to the same beneficiary, or (b) a change in the designated beneficiary and the
new designated beneficiary is not a family member.
Under a CESA, the amount in box 2 is included in income if there has been a
change in the designated beneficiary and the new designated beneficiary is not
a family member or is over age 30 (except for beneficiaries with special needs).
Also, an additional 10% tax may apply to part or all of any amount included in
income from the CESA or QTP. See Form 5329 and your tax return instructions
for more information.
If a final (total) distribution is made from your account and you have not
recovered your contributions, see Pub. 970 to determine if you have a
deductible loss and how to claim it.
Box 3. Shows your basis in the gross distribution reported in box 1.
Box 4. This box is checked if a trustee-to-trustee transfer was made from one
QTP to another QTP, from one CESA to another CESA, or from a CESA to a
QTP. However, in certain transfers from a CESA, the box will be blank.
Box 5. Shows whether the gross distribution was from a QTP (private or state)
or from a CESA.
Box 6. The designated beneficiary is the individual named in the document
creating the trust or custodial account to receive the benefit of the funds in the
account. If you are not the designated beneficiary, see Pub. 970 and the
Instructions for Form 1040.
Distribution codes. For 2018, the payer/trustee may, but is not required to,
report (in the box below boxes 5 and 6) one of the following codes to identify the
distribution you received: 1—Distributions (including transfers); 2—Excess
contributions plus earnings taxable in 2018; 3—Excess contributions plus
earnings taxable in 2017; 4—Disability; 5—Death; 6—Prohibited transaction.
Future developments. For the latest information about developments related to
Form 1099-Q and its instructions, such as legislation enacted after they were
published, go to www.irs.gov/Form1099Q.
