Instructions For Form 1099-Q - 2006 (Page 3 of 25) in pdf

2006

Department of the Treasury

Internal Revenue Service

Instructions for

Form 1099-Q

Section references are to the Internal Revenue Code unless otherwise noted.

the state, enter the name of the state on the first name line

Reminder

and the name of the program on the second name line.

In addition to these specific instructions, you should also use

For a Coverdell ESA, enter the name and EIN of

the 2006 General Instructions for Forms 1099, 1098, 5498,

the trustee.

and W-2G. Those general instructions include information

about:

Recipient’s Name and Social Security

•

Backup withholding

Number (SSN)

•

Magnetic media and electronic reporting requirements

•

For a qualified tuition program, list the designated

Penalties

•

beneficiary as the recipient only if the distribution is made

Who must file (nominee/middleman)

•

(a) directly to the designated beneficiary or (b) to an

When and where to file

•

eligible educational institution for the benefit of the

Taxpayer identification numbers

•

designated beneficiary. Otherwise, list the account owner as

Statements to recipients

•

the recipient of the distribution. Enter the SSN for the

Corrected and void returns

•

applicable recipient.

Other general topics

For a Coverdell ESA, enter the name and SSN of the

You can get the general instructions from the IRS website

designated beneficiary as the recipient.

at or by calling 1-800-TAX-FORM

(1-800-829-3676).

Account Number

The account number is required if you have multiple

accounts for a recipient for whom you are filing more than

Specific Instructions for Form 1099-Q

one Form 1099-Q. Additionally, the IRS encourages you to

designate an account number for all Forms 1099-Q that you

File Form 1099-Q, Payments From Qualified Education

file. See part L in the 2006 General Instructions for Forms

Programs (Under Sections 529 and 530), if you are an

1099, 1098, 5498, and W-2G.

officer or an employee, or the designee of an officer or

employee, having control of a program established by a

Box 1. Gross Distribution

state or eligible educational institution and made a

Gross distributions from a qualified tuition program,

distribution from a qualified tuition program. A trustee of a

whether in cash or in kind, include amounts for tuition credits

Coverdell education savings account (ESA) must file Form

or certificates, payment vouchers, tuition waivers, or other

1099-Q to report distributions made from Coverdell ESAs.

similar items. Gross distributions also include a refund to the

Do not file Form 1099-Q for a change in the name of the

account owner or the designated beneficiary, or to the

designated beneficiary on a qualified tuition program

beneficiary upon death or disability. For more information on

account if the new beneficiary is a member of the former

reporting distributions, see Proposed Regulations

beneficiary’s family. Also, for a Coverdell ESA, the new

section 1.529-4.

beneficiary must be a member of the designated

Gross distributions from a Coverdell ESA include

beneficiary’s family and be under age 30 (except

amounts for a refund, a payment upon death or disability, or

beneficiaries with special needs).

a withdrawal of excess contributions plus earnings.

A family member of the designated beneficiary includes

If earnings and basis are not reported for Coverdell

their spouse, children and their descendants, stepchildren

ESA distributions, leave boxes 2 and 3 blank. Do not

and their descendants, siblings and their children, parents

enter zero. Instead, you must report the fair market

CAUTION

and grandparents, stepparents, and their spouses. It also

value (FMV) as of the end of the year in the blank box below

includes the first cousins of the designated beneficiary.

boxes 5 and 6. Label the amount “FMV.” See Notice

2003-53, which is available on page 362 of Internal

Statements to Recipients

Revenue Bulletin 2003-33 at /pub/irs-irbs/

If you are required to file Form 1099-Q, you must provide a

irb03-33.pdf, for more reporting requirements.

statement to the recipient. Furnish a copy of Form 1099-Q

Box 2. Earnings

or an acceptable substitute statement to each recipient.

Also, see part M in the 2006 General Instructions for Forms

To determine the earnings (or loss) on the gross distribution

1099, 1098, 5498, and W-2G.

reported in box 1, use the earnings ratio described in

Proposed Regulations section 1.529-3 and Notice 2001-81.

Payer’s Name and Federal Identification

You can find Notice 2001-81 on page 617 of Internal

Number

Revenue Bulletin 2001-52 at /pub/irs-irbs/

irb01-52.pdf.

For the payer’s/trustee’s name and federal identification

number, enter the name and employer identification number

Enter the earnings in box 2. If there is a loss and this is

(EIN) of the qualified tuition program. For a program

not the final year for distributions from the account or there

established and maintained by a state that uses the EIN of

are no earnings, enter zero in box 2. Enter a loss in box 2

Cat. No. 32260M

Instructions For Form 1099-Q - 2006 Page 3

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