How does Turbo Tax handle Qualified Contribution Distributions on the 2020 version?

[nolan-clement]

I'm looking for help in how to show a 1099-R distribution as a QCD

[AnnetteB6]

When you transfer part of your IRA distribution to a charity as a Qualified Charitable Distribution (QCD), TurboTax will take your age into account and determine if you qualify to make a QCD.  After you enter the information from your Form 1099-R which reports the distribution there will be some follow-up questions.  One of those questions will be if the distribution was transferred to a qualified charitable organization.  You can choose either all, part, or none of the distribution was transferred.  This will take care of reporting the distribution correctly on your return.

Then, on your actual Form 1040, line 4a will include the amount of your distribution and line 4b will show any taxable amount ($0 if the entire distribution was transferred to the charitable organization) and the designation QCD will be shown on that line as well.

Use the following steps to get started entering your Form 1099-R that reports the distribution from your IRA:

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
• This opens a box where you can type in “1099-R” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to 1099-R”
• Click on the blue “Jump to 1099-R” link

[SteamTrain]

BUT....note that if you turned exactly 70.5 at any date in 2020, there is a bug in the software that needs to be corrected first:

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-qualified-charitable-distribu...

[SLM19]

At this point, until there's an update, the bug is there. Definitely follow the fix link. I temporarily changes my birth year, got the correct questions re QCD and changed my birth date profile back later.

[forrest4]

For several years, the instructions on entering QCD as late as July 2021 worked fine (for years before 2021).  I have Turbotax for 2021 and there is no question about entering QCD.  Do I have to pay a CPA this year for that one item?

[VolvoGirl]

It is very early.   There will be many program updates.   And you probably haven't received the 1099R yet.   Revisit that area in a couple weeks or in Jan.  Keep checking.

[KarlJ]

It is now February and I still can't figure out how to report a QCD with TurboTax 2021

[DaveF1006]

@KarlJ It depends.  In your Turbo Tax Online. Enter your QCD in accordance with the following instructions given by AnnetteB6 in the following Turbo Tax link.. 

When you transfer part of your IRA distribution to a charity as a Qualified Charitable Distribution (QCD), TurboTax will take your age into account and determine if you qualify to make a QCD.  After you enter the information from your Form 1099-R which reports the distribution there will be some follow-up questions.  One of those questions will be if the distribution was transferred to a qualified charitable organization.  You can choose either all, part, or none of the distribution was transferred.  This will take care of reporting the distribution correctly on your return.

Then, on your actual Form 1040, line 4a will include the amount of your distribution and line 4b will show any taxable amount ($0 if the entire distribution was transferred to the charitable organization) and the designation QCD will be shown on that line as well.

Use the following steps to get started entering your Form 1099-R that reports the distribution from your IRA:

1. To report a QCD in TurboTax, enter the Form 1099-R under Wages & Income -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R).  
2. In the follow-up indicate that some or all of the distribution was transferred to charity.  TurboTax will include the entire amount on Form 1040 line 15a of Form 1040 line 11a but will exclude the QCD amount from the amount on line 15b or 11b.  TurboTax will include the notation "QCD" next to the line.
3. Let me know if this works.

[lreynolds32]

I imported Investment data from my financial institution which included the 1099-R. There was no follow-up asking if any of the distribution was transferred to a charity. How do I enter this for accurate reporting on form 1040?

[DaveF1006]

It depends. Qualified Charitable Distributions are only tax deductible on IRA distributions. Please look at the following IRS link for further details under Qualified Charitable distributions.

@lreynolds32

[Jerry Gordon]

I am not getting the question asking if any of my charitable contributions were from an IRA. I don't know why. I did complete paperwork to Fidelity that maintains my IRA for the charitable donations.

[BillM223 · Accepted solution]

First, the question about a QCD (Qualified Charitable Distribution) is asked as part of the 1099-R interview, that is, after you enter your 1099-R AND if your distribution is from an IRA, then you may be asked the question about QCD.

Second, unless you are at least 70 1/2 (and therefore eligible to make a QCD), TurboTax won't even ask you the question, because you couldn't answer YES anyway.

This means that the question about a QCD is NOT to be found in the charitable contribution section for Schedule A.

[las76]

I am running into this same problem. Have you been able to figure it out? This is an inherited IRA. All of the distributions were qualified charitable donations but right now TurboTax is counting all of it as income. I've tried changing my age to prompt the question about it being a donation but it didn't work.

[RobertB4444]

@Ias76  You will have to manually adjust the taxable amount from the 1099-R to reflect the charitable donation.  If the inherited IRA is set up for charitable donation then adjusting the taxable amount is all that the program would do anyway.  Save the paperwork in case you get an IRS inquiry.

[rbg19430121]

Thanks. Following your answer step by step I finally noticed it. 

In the interview itself I had been focused on looking for the letters "QCD", or "Qualified . . .Distribution" spelled out. 

There are (as there needs to be) so many of these Do any of these situations apply? questions thru the whole interview, and so few end up applying, that it was ease for me (and others?) to rush through them. I would not have missed it if the interview question had just included its proper, common, name or acronym, "QCD", perhaps in ( ).

I can appreciate the goal of making the program as understandable, easy, and friendly as possible for unsophisticated users by using descriptions of situations rather than just the proper name.  I  (and others?) have a little more understanding and experience than that and have come to think in terms of those names/acronyms.  Adding a short reference to them in the questions and in the Help items (as you did in your answer to me)  would increasee the same three features, "understandable, easy, and friendly", for another category of TurboTax users.

Thanks again.