1099-R

[Tater19]

IRA custodians have a new 1099-R code 'Y' box to complete for QCD's.  I have a SCHWAB IRA account with check writing privileges. All of the checks I write and distribute qualify as QCD's. My none QCD distributions are done via EFT direct deposit.  SCHWAB advises me that they do not intend to review my check payees to determine their 501(C)(3) eligibility so the 1099R they issue to me will have zero in the new "Y" box.  What can Turbo Tax do to assist customers in this situation?  FYI: way over half of my IRA distributions qualify as QCD's.  

[fanfare]

Y is a new code that will appear in Box 7, when applicable.

If Schwab won't put that code, treat the 1099-R in Turbotax the same way you would for this tax year.

If TurboTax 2025 requires a code Y for QCD, you will have an issue.

@Tater19 

[rjs · Accepted solution]

Code Y is not a box on Form 1099-R. It's a new distribution code that can be used in box 7 together with another distribution code, such as 7 or 4.

As fanfare said, distribution code Y is new for 2025. The IRS instructions for code Y are very brief and very vague. There are a lot of possible complications that the instructions do not cover, and a lot of unanswered questions. The IRS is probably going to have to issue additional guidance for using code Y before the end of the year. All of us, including the TurboTax software developers, will have to wait for that additional guidance. I'm sure that TurboTax will provide a way of entering QCDs that were not reported with code Y (as it does for 2024 and earlier years, where code Y does not exist). I'm also sure that there will be a lot of confusion, rough edges, and possible bugs since it's new, and the IRS instructions are inadequate.