1099-R Code Y

[rhmaynard]

TT seems not to understand the new Code Y for a QCD.  I should be able to list the distribution on the 1099 with a Y code as 0 taxable, but it thinks there is an error if the code is not J or T.  This new code is not being accounted for properly.  

Please let me know when this has been corrected.  I have plenty of time before April.

[DoninGA]

Code Y is not used on a 2025 Form 1099-R.  It will be used on the 2026 Form 1099-R.

[rhmaynard]

Page  20 of the 2025 Instructions for Forms 1099-R and 5498  would disagree with you on this subject .

The last listed code is Y for Qualified charitable Distributions.  

Page 1 notes this as "What's new".  No publication effective date listed on the form, so, I can't tell how new this is, but the financial institution used it on two of my 1099s which should be correct.

Sorry I can't attach the directions here.

Thanks!

Bob Maynard

[DoninGA]

@rhmaynard You are correct.  It is in the instructions for the 2025 Form 1099-R.  And it is shown on the 2025 IRS Form 1099-R.

My mistake, was looking at a 2024 Form 1099-R.

There is a code Y for box 7 of the 1099-R when using the TurboTax online editions and the TurboTax desktop editions.

Created a Form 1099-R with $5,000 in box 1 and box 2a empty.  Box 7 used a code of Y.  Continued through the various screen and landed on the screen How much did Payer transfer directly to charity?  Enter $5,000 and on the following screen $5,000.00 of your retirement distribution is now designated as a nontaxable Qualified Charitable Distribution (QCD).

[rhmaynard]

Okay, thanks.  I missed that the forms needed review after importing.  So, I ran through all the steps and marked the appropriate boxes.  However, I'm still not able to pass the Smart check.

Error message is "Taxable amount should not be zero if there is no prior year excess traditional IRA contribution on line 4 of the IRA Information Worksheet."  Error appears on both 1099s that have the QCD where the taxable amount should be zero.  I've not had excess contributions ever, so I'm not sure what's going on.

I should have told you where (which step) I was getting the error from.  That might have helped you.

Of course, there's always filing with the "error" intact, but as I mentioned, I  have time.

Thanks for your help!

Bob Maynard

[DoninGA]

@rhmaynard For this issue, it would be better to delete the Form 1099-R's and then re-enter them manually to see if the error persists.