topic I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax? in Retirement tax questions

I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

telaviv — Thu, 06 Jun 2019 06:02:57 GMT

How can I deduct charitable contributions made as a part of my Required Minimum Distribution?

As you continue with the interview screens, you will be a...

Coleen3 — Thu, 06 Jun 2019 06:02:59 GMT

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 - Qualified Charitable Distribution (QCD). See the screenshot below.

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.

See the screenshot below.

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

jhtourtelotte — Sat, 28 Mar 2020 21:36:53 GMT

How do I make this deduction on my state return?

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

dmertz — Sun, 29 Mar 2020 02:14:22 GMT

State returns generally begin with your federal AGI from which the QCD amount has already been excluded.

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

bae4360 — Sun, 24 Jan 2021 00:36:31 GMT

Turbo tax does not handle someone who was 70.5 in 2020 and not 72. My work around was to change my age:

From 1949

To 1948 and then I could enter the QCD information. It looks like a calendar arithmetic error.

If you are 72 and do a QCD the software will work. Per page 25 of the 1040 instructions if you are 70.5 when you did a QCD it is tax free. I was 70.5 in Jan of 2020 so the software did not work for me unless I changed my birth year from 1949 to 1948.

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

SweetieJean — Sun, 24 Jan 2021 00:55:36 GMT

Be careful about changing your age, just on the off chance that some state tax benefit kicks in at age 72. Also, your tax return may reject because the SSN won't match the correct issue year for that SSN.

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

macuser_22 — Sun, 24 Jan 2021 01:00:36 GMT

@SweetieJean wrote:

Be careful about changing your age, just on the off chance that some state tax benefit kicks in at age 72. Also, your tax return may reject because the SSN won't match the correct issue year for that SSN.

No problem. It only has to be changed when making the QCD enter, then changed back to the correct age.

2020 TurboTax presently (version R13) has a bug the prevents it from asking the necessary question for those with birthdates between July 1, 1949 and June 30, 1950. 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.

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

bae4360 — Sun, 24 Jan 2021 13:51:14 GMT

So I was 70.5 in Jan 2020 and turbo tax would not take my QCD. This is what I did to get the information into turbotax:

I changed my birth year from 1949 to 1948 and then I was able to enter the data into TurboTax. This was the version I was running as of 1/23/2021. I did get an email warning of the age issue. I was able to go back and then change my year back to 1949 and my QCD was accepted into line 4b of my 1040.

Everything I have read says I can take a QCD in 2020 because I am 70.5. My RMDs starts in 2021.

Please read page 24 in the 1040 instruction form from the IRS. It's your signature on the tax form and you have to be sure you are meeting the tax code.

Also I did look at a 1040 and I did not see a birthday on the form.

Turbo tax would have worked for me if I was 72 in 2020 but it did not work correctly for me because I was 70.5. Thank you for sending me email on the year. I think this issue is with TurboTax not being able to handle someone who is 70.5 and not getting a RMD but who can do a QCD.

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

macuser_22 — Sun, 24 Jan 2021 16:02:18 GMT

@bae4360 As I posted directly above your post, this is a Bug in TurboTax that is being worked on.

Because Congress changed the RMD age form 70 1/2 to 72, they changed that in TurboTax, but overlooked that the QCD question was tied to the RMD questing so if you do not get the RMD question you will also not et the QCD question.

The only way to fix this will be is with a new interview questions just for the QCD based on the 70 1/2 age.

I don't see them doing that prior to the big 1099-R interview change that is coming to add the new CARES act 8915-E form and associated interview questions - whenever the IRS releases that form - only the IRS knows when.

For now the age change workaround works fine.

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

Fulvio2 — Thu, 28 Jan 2021 21:27:28 GMT

Are you sure that Turbo Tax is working on the QCD error in the software? I don't need to pursue it if they are - else, I'll make sure they are.

What are the CARES changes that are coming from the IRS?

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I sh...

SamS1 — Thu, 28 Jan 2021 21:55:38 GMT

Yes. The Qualified Contribution Distribution is working in TurboTax. If you are at least 70 1/2, TurboTax will ask whether a portion of your withdrawal was QCD under the Uncommon Situations screen directly after you entered the 1099R information in TurboTax Online. Make sure and review your "My Info" section of TurboTax to insure your birthdate is entered correctly.

The Cares Act suspended the Required Minimum Distribution for 2020. If you took out your RMD prior to passage of the Cares Act, you had the option to roll it back into your IRA and not pay tax on it if done by 12/31.

Here is some more information on how the Pandemic affected your taxes.

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I sh...

dmertz — Thu, 28 Jan 2021 22:11:15 GMT

Step-by-step mode in NOT handling QCDs correctly for those who have a birthdate between July 1, 1949 and June 30, 1950. The workaround for this bug is described above. As far as I can determine, there is no "Uncommon Situations" page that appears in the CD/download version of TurboTax that can be used as a workaround under these circumstances.

[Edit] There is also nothing on the Uncommon Situations page in online TurboTax regarding QCDs.

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

lindaspottsmichael — Fri, 29 Jan 2021 00:31:34 GMT

Turbo tax Premier is not giving me the option of showing it was a Qualified Charitable Deduction. I was 70.5 but did not take any other RMDs. I just took the QCD.

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I sh...

Irene2805 — Fri, 29 Jan 2021 17:23:09 GMT

Please see macuser_22's comments above for a workaround if our birthdate is between July 1, 1949 and June 30, 1950.

@lindaspottsmichael

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I sh...

bae4360 — Sun, 31 Jan 2021 13:56:25 GMT

As of 1/31/2021 my turbo tax downloaded software still has a computer bug that requires a birthday date change to 1948 to input a QCD, if you were born between Jul 1 to Dec 31 1949. After input your birth year can be changed back and you will have entered your QCD. :(

Re: As you continue with the interview screens, you will be a...

kratzeron — Fri, 12 Feb 2021 16:33:15 GMT

IRS does not tie QCD to MRD. IRS requires age 70-1/2, but it does not have to come out of MRD. When the tax law changed it only affected MRD, not the QCD.

TT does not account for this properly. From the IRA screen, it will not go to questions about QCD. I changed my birth year (looks like I'm 72), and then it will work.

TT needs to correct this in Step-by-Step and forms.

Re: As you continue with the interview screens, you will be a...

macuser_22 — Fri, 12 Feb 2021 16:41:05 GMT

@kratzeron wrote:

IRS does not tie QCD to MRD. IRS requires age 70-1/2, but it does not have to come out of MRD. When the tax law changed it only affected MRD, not the QCD.

TT does not account for this properly. From the IRA screen, it will not go to questions about QCD. I changed my birth year (looks like I'm 72), and then it will work.

TT needs to correct this in Step-by-Step and forms.

2020 TurboTax presently has a bug the prevents it from asking the necessary question for those with birthdates between July 1, 1949 and June 30, 1950. 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.

Re: As you continue with the interview screens, you will be a...

kratzeron — Fri, 12 Feb 2021 18:01:22 GMT

Thank you for the update.

I tried a workaround...

I went back to Personal Info and changed my birth date so I would appear to be 72.

I deleted Form 1099-R; Then created a new one with same information.

This worked... I was able to get to the right questions about RMD and QCD and amounts.

I checked NO RMD; Part of distribution went charity (QCD); Entered $amount... continue...

Then I went back and changed my birth date so I'm young 71 again. 🙂

I checked through forms at my correct age and everything looks good.

* I still prefer having TT fix it. 🙂

Re: As you continue with the interview screens, you will be a...

kratzeron — Fri, 12 Feb 2021 20:10:44 GMT

I'm new at this... I just saw that there are similar posts from 3 weeks ago and with the same change the birth date temp fix. Sigh... I thought I had come up with a new idea.

I am concerned though. I called the TT help desk yesterday, and they didn't know about this problem.??

Does TT Tech Support actually follow up on problems?

Re: I am over 70.5 and made charitable contributions as a part of my RMD from an IRA. How do I show this in TurboTax?

deprabbit — Thu, 04 Mar 2021 23:43:19 GMT

Changing my birth date by one year 1o 1948 worked great. I changed it back to 1949. This is a problem that Turbo Tax should fix