Instructions For Form 1099-Q - 2018 (Page 2 of 2) in pdf

vouchers, tuition waivers, or other similar items. Gross

Coverdell ESA, check this box if the distribution was made

distributions also include a refund to the account owner or

directly to another Coverdell ESA or to a QTP.

the designated beneficiary, or to the beneficiary upon death

In a trustee-to-trustee transfer between qualified

or disability. For more information on reporting distributions,

education programs, the distributing program must provide

see Proposed Regulations section 1.529-4.

you with a statement reporting the earnings portion of the

distribution within 30 days of the distribution or by January

Gross distributions from a Coverdell ESA include amounts

10, whichever is earlier. You must properly account for this in

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

computing the earnings or (loss) reported in box 2 and the

withdrawal of excess contributions plus earnings.

basis reported in box 3.

If earnings and basis are not reported for Coverdell

If you do not have records showing that a gross

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

distribution from a Coverdell ESA made in 2018 was

enter zero. Instead, you must report the fair market

TIP

CAUTION

a trustee-to-trustee transfer, leave box 4 blank.

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

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

2003-53, 2003-33 I.R.B. 362, available at

IRS.gov/irb/

Box 5. Checkbox

2003-33_IRB/ar15.html, for more reporting requirements.

Check the “Private” box if the distribution is from a QTP

established by one or more private eligible educational

Box 2. Earnings

institutions or check the “State” box if the distribution is from

a QTP established by a state. Otherwise, check the

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

“Coverdell ESA” box.

reported in box 1, use the earnings ratio described in

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

Box 6. Designated Beneficiary Checkbox

Notice 2016-13. You can find Notice 2001-81 on page 617 of

Internal Revenue Bulletin 2001-52 at

IRS.gov/pub/irs-irbs/

Check the box if the recipient is not the designated

irb01-52.pdf

and Notice 2016-13 at

IRS.gov/irb/

beneficiary under a QTP or a Coverdell ESA (see section

2016-07_IRB/ar06.html.

529(e)(1)).

Enter the earnings in box 2. If there is a loss and this is not

Distribution Codes

the final year for distributions from the account or there are

For 2018, you may, but are not required to, include one of the

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

following distribution codes in the blank box below boxes 5

this is the final year for distributions from the account.

and 6. You may abbreviate as needed. For example, for

Earnings are not subject to backup withholding.

distribution code 1, you may enter “distr. code 1.”

If you are reporting a distribution from a Coverdell ESA

that includes a returned contribution plus earnings, you

Distribution Code

Use this code for...

should file two Forms 1099-Q, one to report the returned

contribution plus earnings, the other to report the distribution

1–Distributions

Distributions (including transfers) to

of the other part of the account.

the recipient and any direct

payments to a qualified educational

You should file a separate Form 1099-Q for any

facility. However, use code 2 or 3

trustee-to-trustee transfer.

for withdrawals of excess

contributions.

For Coverdell ESAs, if you are not reporting earnings, see

2–Excess contributions plus

Withdrawals of excess Coverdell

the Caution above.

earnings taxable in 2018

ESA contributions and earnings

For Coverdell ESAs, if you are reporting earnings on

unless code 3 applies.

a distribution of excess contributions, use the method

TIP

3–Excess contributions plus

Withdrawals of excess

under Regulations section 1.408-11 for calculating

earnings taxable in 2017

contributions from a Coverdell ESA.

the net income attributable to IRA contributions that are

Advise payees, at the time the

distributed as a returned contribution.

distribution is made, that the

earnings are taxable in the year in

which the excess contributions

If the amount in box 2 includes earnings on excess

were made.

contributions, enter distribution code 2 or 3 (as applicable) in

the box below boxes 5 and 6 (below the shading). See

4–Disability

Distributions you made after the

Notice 2003-53 for more information.

recipient was disabled (see section

72(m)(7)).

Box 3. Basis

5–Death

Payments to a decedent's

For QTPs and Coverdell ESAs, if you can determine basis,

beneficiary, including an estate.

enter in box 3 the basis included in the gross distribution

6–Prohibited transaction

Prohibited transactions. See

reported in box 1. The amount in box 3 must equal box 1

sections 408(e)(2) and 408(e)(4) for

minus box 2.

similar rules that apply to a

Coverdell ESA.

For determining basis of a Coverdell ESA, you may

rely on Notice 2001-81.

TIP

Box 4. Trustee-to-Trustee Transfer Checkbox

Check this box if the distribution was made directly

(trustee-to-trustee transfer) from one QTP to another. For a

-2-

Instructions for Form 1099-Q (2018)

Instructions For Form 1099-Q - 2018 Page 2

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