As you continue with the interview screens, you will be asked if you donated a portion or all of the distribution to charity. There are eligibility requirements. TurboTax will exclude this amount and will show the notation QCD.
See below for that list.
A
QCD is a direct transfer of funds from your IRA custodian, payable to a
qualified charity. QCDs can be counted toward satisfying your minimum required
distributions (MRDs) for the year, as long as certain rules are met.
In addition to the benefits of giving to charity, a QCD
excludes the amount donated from taxable income, which is unlike regular
withdrawals from an IRA. Keeping your taxable income lower may reduce the
impact to certain tax credits and deductions, including Social Security and
Medicare.
Can I make a QCD?
While
many IRAs are eligible for QCDs—Traditional, Rollover, Inherited, SEP (inactive
plans only), and SIMPLE (inactive plans only)* —there are requirements:
- You must be 70½ or older to
be eligible to make a QCD.
- QCDs are limited to the
amount that would otherwise be taxed as ordinary income. This excludes
non-deductible contributions.
- The maximum annual amount
that can qualify for a QCD is $100,000. This applies to the sum of QCDs
made to one or more charities in a calendar year. (If, however, you file
taxes jointly, your spouse can also make a QCD from his or her own IRA
within the same tax year for up to $100,000.)
- For a QCD to count towards
your current year’s MRD, the funds must come out of your IRA by your MRD
deadline, generally December 31.
