QCD

[stolat10]

What do I have to do to report a Qualified Charitable Distribution (QCD)? Do I have to fill out 1055-R Forms and submit them to the IRS? I already filled out a form from my financial institution and they payed the money to the charity institution from my RMD.

[BettieG]

Hi @stolat10!  Great question!  

To report a qualified charitable distribution on your Form 1040 tax return, you generally report the full amount of the charitable distribution on the line for IRA distributions. On the line for the taxable amount, enter zero if the full amount was a qualified charitable distribution. Enter "QCD" next to this line. See the Form 1040 instructions for additional information.

You must also file Form 8606, Nondeductible IRAs, if:

• you made the qualified charitable distribution from a traditional IRA in which you had basis and received a distribution from the IRA during the same year, other than the qualified charitable distribution; or
• the qualified charitable distribution was made from a Roth IRA.

This can easily be done in TurboTax!

I hope this is helpful!  If so, please give me a thumbs up!

[VolvoGirl]

After you enter the 1099R into your tax return it will ask if it was a QCD and how much.  Is this for 2022 or 2023?  For 2022,  If you already filed your 2022 return you may need to amend it.

[K M W · Accepted solution]

There is no special code on the 1099R for a Qualified Charitable Distribution - it is up to you to report the portion of your distribution that meets the rules to be not taxed as a qualified charitable distribution.

To report your qualified charitable contribution, you would simply report the 1099R as issued to you, but then the taxable amount would be adjusted to eliminate the portion used for as a Qualified Chartable Distribution.  The gross distribution of the IRA will show on the front of the 1040 form for IRA distributions; however the line for taxable amount should show "QCD" and the portion used for the QCD should not be included in the taxable amount line.

Remember you cannot claim these charitable contributions as an itemized deduction on Schedule A for the amount you are reporting as a QCD.

[rschule1]

Hi There:

Each bank or brokerage company has its own internal form to transact a QCD. From there, at the end of the tax year, it will issue you an appropriate  form1099-R.  From there use form 1099R with Turbo Tax Online to report  to the IRS the QCD, which the program will include as part of your tax return.  

[stolat10]

For 2023

[balex]

I import my 1099R from my brokerage account.  Turbo tax does not ask me questions about my distribution.  I am 75 yrs old.  box 7 has 7 and ira/sep/simple is checked.   Turbo Tax help says "the turbo tax QCD question is tied to the RMD question".  where is the RMD question?

[dmertz]

In the online version of TurboTax there is a page that list a number of checkboxes where there is a checkbox that you must mark to indicate that some or all of the distribution was transferred to charity.

[OldRock]

I did enter "QCD" on the Taxable Amount line supporting detail.  I entered zero as the taxable amount and entered the full distribution amount as a Qualified Charitable Distribution.  TurboTax flags the zero taxable amount as an error.  

[MayaD]

Enter your 1099-R form (even though there's no indication that it was a QCD), 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 or 1040-SR. The taxable amount reported on Line 4b will be the total distribution less the QCD amount and will have "QCD" entered next to it.

For more information, check: What is a Qualified Charitable Distribution?

[OldRock]

Thanks Maya.  I did all that but the zero Taxable Amount is still flagged as an error during the Federal Review stage.  It says it "should not be zero if there is no prior year excess traditional IRA contribution."  It also flags an error on form 8606-T, asking for an explanation for Return of Prior Year Excess Traditional IRA Contributions.  This is not relevant to my return.   

[DawnC · Accepted solution]

Delete the 1099-R you entered and re-enter it.   When you enter it, enter it exactly how it reads, the taxable amount (box 2a) should not be zero when entering it.   If you change it to zero when entering it, you will get the error.   Let TurboTax make the adjustment in the follow-up questions.

After you enter it, you will go through the follow up questions and mark that the distribution was a QCD, then TurboTax will make the changes to the taxable amount automatically.    You do not have to enter any supporting details; TurboTax does that when adjusting the taxable amount.   

[OldRock]

Thanks for the advice DawnC - that works and now it's all done, with no errors flagged. 

However, that is directly contrary to the advice from another expert earlier in this thread.  BettieG said "On the line for the taxable amount, enter zero if the full amount was a qualified charitable distribution."  This is clearly wrong and should be deleted from the thread.