The draft 2025 Instructions for Form 1099-R introduce a new code Y for IRA custodians to report distributions made directly to a charity that are intended to be QCDs. This means that 2025 TurboTax will need to make changes to accommodate this new code.
I anticipate bugs being present in the initial implementation, so be on the lookout next year for anything that doesn't make sense with regard to reporting QCDs in TurboTax. Note that even if the distribution is reported with code Y, the distribution might not qualify as a QCD (or otherwise might not make sense to treat as a QCD), so when entering a code-Y Form 1099-R TurboTax will need to provide an option to indicate that less than the full amount reported on the Form 1099-R is a QCD.
Because purported QCDs and non QCD distributions from the same account made in 2025 and beyond will need to be reported on separate Forms 1099-R, this will require TurboTax to provide even more convoluted instructions for reporting RMDs than are already present. I predict that this will serve to increase the already astronomical number of question on this forum related to reporting RMDs in TurboTax.
