Calculation of Earnings
In legislation passed in December 2015, Congress made three changes to 529 accounts. One of those modified, effective for 2015, the calculation of earnings on 529 account distributions for those with more than one 529 account. By law, Virginia529 annually must send a federal Form 1099-Q, Payments from Qualified Education Programs, with respect to all 529 account distributions, showing the amount of distributions and earnings. If all your distributions were qualified, then this change does not impact you for 2015 as you do not report the earnings. For those with nonqualified distributions who will require the 1099-Q for tax reporting purposes, Virginia529 anticipates a delay beyond the normal January 31 deadline for issuing 1099-Qs this year. We will make system changes to address the new earnings calculation requirements as quickly as possible and make every effort to issue 1099-Qs with as little delay as possible. This change does not impact the timing of account statements.