Notice 2016-13: Transition relief from section 529 qualified tuition program reporting

Notice 2016-13: Transition relief from section 529

The IRS today released an advance version of Notice 2016-13 to provide transition relief for section 529 qualified tuition programs that timely file a 2015 Form 1099-Q, Payments From Qualified Education Programs (Under Sections 529 and 530), but that does not reflect the repeal of the aggregation requirement under section 529(c)(3)(D) for distributions from qualified tuition programs.

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Notice 2016-13 [PDF 23 KB] reflects concerns expressed by section 529 qualified tuition programs about their inability to adjust their systems to make retroactive changes to the new method of calculating the earnings portion of a distribution before the due date of the 2015 Form 1099-Q. The notice states that the IRS will not impose penalties under section 6693 solely because of a reported earnings computation that does not reflect the repeal of section 529(c)(3)(D). 

This notice is limited to 2015 Forms 1099-Q required to be filed by February 29, 2016 (or March 31, 2016, if filed electronically).

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