A direct transfer of funds from your IRA custodian, payable to a qualified charity is referred to as a Qualified Charitable Distribution (QCD). QCDs can be counted toward satisfying your required minimum distributions (RMDs) for the year, as long as certain rules are met. While the QCD amount is not taxed, you may not then claim the distribution as a charitable tax deduction.
To Report a Qualified Charitable Donation, your Form 1099-R must have code 7, and the IRA/Simple box must be checked. In addition, you must be at least age 70 1/2 (according to the date of birth in TurboTax) at the end of the tax year. As you enter your 1099-R, you will be asked any of your distribution was transferred to charity. If you answer yes, the next screen will ask how much you transferred to charity. The next screen will let you know that the amount you transferred to charity is designated as a QCD (if you qualify for a QCD). This is the only place that you will actually see QCD mentioned.
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Reporting IRA distribution: 1st page-all info from 1099R form, 2nd-source info (from IRA), 3rd-situations like disaster relief or HSA transfer (no charity option), 4th page-rollover? That's it. I don't see any place asking if the distribution was to a charity. Am I missing something?
There is a know issue with this on TurboTax. If you are less than 72 years of age, follow the instructions below to be able to enter the Qualified Charitable Donation.
As a workaround for this,
- with the CD/download version you can provide the QCD-amount information on the 1099-R in forms mode
- or in any version of TurboTax you can temporarily change your birthdate in TurboTax to something before July 1, 1949,
- edit the 1099-R form in TurboTax and answer the question asking how much was transferred to charity,
- then change your birthdate in TurboTax back to your actual birthdate.
This is due to TurboTax implementing the new IRA RMD age from 70 1/2 to 72, but overlooking that the 70 1/2 age for the QCD did not change. The TurboTax QCD question is tied to the RMD question so if you don't get the RMD question you will not get the QCD question either. This should be fixed in a future update - no telling when, but there is no downside to the workaround as long as the correct DOB is changed back after entering the QCD.