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Form 1099-Q

Form 1099-Q
Who needs it?
Investors who own a Coverdell Education Savings Account (ESA) and took a distribution or re-characterized ESA assets.
When is it mailed?
By the first business day on or after January 31.

Payments from Qualified Education Programs

Form 1099-Q reports distributions, including removal of excess contributions, made from Coverdell Education Savings Accounts (“Coverdell ESAs”) (formerly known as Education IRAs). If you took a distribution or re-characterized assets from your Domini Coverdell ESA during 2015, you will receive a Form 1099-Q.

If you received more than one type of distribution from a Coverdell ESA in 2015, you will receive a consolidated Form 1099-Q showing the amount for each type of distribution.

Although Form 1099-Q has boxes for reporting the earnings (or loss) on the distribution, as well as the cost basis of the shares sold, Coverdell ESA recordkeepers and trustees generally do not have the information required to calculate these amounts. Instead, in accordance with guidance issued by the Internal Revenue Service, we are providing you with the fair market value of your Coverdell ESA as of December 31, 2015. We suggest that you review IRS Publication 970, Tax Benefits for Education for more information on how to calculate the earnings portion of the gross distribution, and for an explanation of “qualified education expenses.” When a distribution from such an account is used for “qualified education expenses” of the account beneficiary, such amount may likely not be taxable.