IRA Charitable Donations

[JSchroeder43]

I withdrew money from my IRA and had it sent directly to my church. Is this taxable income in Wisconsin?

[BillM223 · Accepted solution]

If you are 70 and 1/2 years of age before the end of the tax year, then you are permitted to make something called a QCD: Qualified Charitable Distribution from an IRA.

This distribution, which may or may not be the RMD (Required Minimal Distribution) is considered tax-free by both the IRS and the state of Wisconsin.

For taxpayers who are old enough, this enables them to take their RMD, send it to a charity, and show no increase of taxable income. This is a benefit to taxpayers who don't need to take the RMD and don't want to pay tax on it.

Wisconsin says this:

"Is Wisconsin following the IRC with respect to IRA distributions to a charitable organizations?

Yes. Beginning with the 2018 taxable year, amounts directly transferred from an individual retirement account to a qualified charitable organization are not included in Wisconsin income. Federal law requires the person to be at least age 70 ½ when the distribution is made and the maximum exclusion from income is $100,000 per person."

Please see the Wisconsin tax website.

[JSchroeder43]

Thank you. What is the proper way for the IRA provider to fill out the 1099-R? I think my provider did it wrong as they listed the donation as taxable income and placed the letter "F" in box 7. The money was sent by them directly to my church.

[DianeC958]

On your 1099-R from the provider, there should be in Box 1 the amount of the Distribution and then in Box 2, the amount should be $0 if the whole amount was sent directly to the charity.

Please check on your 1040 form Line 4b to verify that the amount that was sent to the charity is not included.