1099-R, QCD error in TurboTax

[PeterNelsonBush]

My 2022 TurboTax will not allow me to enter the $2,000 that was donated as a QCD (Qualified Charitable Deduction) from my wife's Traditional IRA's RMD.  TurboTax turns the numbers red each time the entry is attempted.  So there is no way to directly report the QCD.   Is Intuit TurboTax going to fix this?  If so, will it be in time to file electronically for the 2022 tax year?

[MonikaK1]

To report a qualified charitable distribution on your Form 1040 tax return, you'll use the 1099-R (even though there's no indication that it was a QCD). Enter the info as a 1099-R and you'll be asked in one of the follow-up questions if it was a Qualified Charitable Distribution.

TurboTax includes the full amount of the distribution reported on your Form 1099-R on line 4a (IRA Distributions) of your Form 1040. The taxable amount reported on Line 4b will be the total distribution less the QCD amount and will have "QCD" entered next to it.

Please see this help article for more information regarding QCDs.

[DoninGA]

Just entered a 1099-R for a Traditional IRA with the taxpayer's age as 72 and code 7 in box 7.  Designated all of the distribution as an RMD and where asked if any amount was for a QCD entered $2,000.  Completed the 1099-R section with no errors.

On the Form 1040 Line 4b QCD was entered and the remaining taxable amount not designated as QCD was entered on 4b.

Delete the Form 1099-R and then re-enter manually.  Carefully review and answer the follow-up questions for the distribution.

[PeterNelsonBush]

I just tried this Reply:  

"Just entered a 1099-R for a Traditional IRA with the taxpayer's age as 72 and code 7 in box 7.  Designated all of the distribution as an RMD and where asked if any amount was for a QCD entered $2,000.  Completed the 1099-R section with no errors.

"On the Form 1040 Line 4b QCD was entered and the remaining taxable amount not designated as QCD was entered on 4b.

"Delete the Form 1099-R and then re-enter manually.  Carefully review and answer the follow-up questions for the distribution."

It does not work in this case, with the TurboTax software that I have.   The 2,000 of the QCD will still only appear in red.

[DoninGA]

@PeterNelsonBush Verify that you software is at the latest release.  Click on Online at the top of the desktop program screen.  Click on Check for Updates.

If at the latest release then save the tax return and close the TurboTax program.  Re-boot you computer.  After the re-boot open the TurboTax program and see if the problem persists.

[PeterNelsonBush]

"Check for Updates" produced a response that everything is up to date.  I shut down my computer completely every night, so it gets re-booted daily.  It hasn't produced any correction to the QCD entry problem.

[dmertz · Accepted solution]

The only reasons that TurboTax would make the QCD entry red is if the IRA/SEP/SIMPLE box is not marked, the individual making the charitable contribution has not yet reached age 70½ as indicated by the birth date entered into TurboTax, the charitable contribution amount exceeds the gross-distribution amount or the distribution code is not 7 or 4.

Is the IRA/SEP/SIMPLE box marked on the Form 1099-R provided by that payer and on TurboTax's 1099-R form?  QCDs are only permitted to be made from IRAs, not from other types of retirement accounts.

If the distribution code is 4, was your wife over age 70½ in 2022?  (If the code is 7, I assume that your wife was over age 70½ since you said that the QCD came from her RMD.)

[PeterNelsonBush]

YES!

Checking the IRA/SEP/SIMPLE box was the answer. Thank you!

My wife was definitely over 70 at the time of the QCD, so that wasn't a problem.

This clears the whole thing up. I always record solutions like this so that it won't be an issue in a subsequent year's tax preparation.

I've noted that I also had to fill out a 1099-R on TurboTax for a Roth IRA conversion.  In that case, I absolutely could NOT check that IRA/SEP/SIMPLE box.  If I did, then the amount of the conversion would turn red, and I couldn't submit the form for e-filing.  If it was left unchecked, everything was fine. 

Thanks very much for your help with this, dmertz.

Pete Bush