I made a donation to a college in Indiana from my IRA. No Federal tax on the donation. Then on the State return I reported the donation on Form CC-40 like I have done for years. This creates a credit that shows on Schedule 6 - Offset Credits. The credit is $100.
Apparently, I cannot do this. In a recent document from the college "A taxpayer should not use a Qualified Charitable Distribution to make contributions that result in state tax credits."
Fortunately, I have delayed mailing my tax returns which were completed weeks ago. I guess I will be redoing my State return. In future years I will just pay cash which gets me the the college credit which is worth more than the Indiana tax on the income / donation.
Maybe there needs to be a question on the source of funds for the donation in Turbo Tax. With all the details of tax law it is hard to get it straight.
Your thoughts?
