Qualified Charitable Distributions Requirements In TaxAct

Qualified Charitable Distributions (QCDs) were first made available to taxpayers in 2007.  A qualified charitable distribution (QCD) is generally a nontaxable distribution made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to an organization eligible to receive tax deductible contributions. You must be at least age 70 1/2 when the distribution was made.

See IRS Publication 17 Your Federal Income Tax For Individuals and IRS Publication 590-B Distributions from Individual Retirement Arrangements (IRAs) for additional information on QCDs.

The TaxAct program has always supported entering QCDs in the tax return.  This option is available after entering Form 1099-R information in the program:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal.
  2. Click Retirement Plan Income to expand the category and then click IRA, 401(k), and Pension Plan Distributions (Form 1099-R)
  3. Click New Copy of Form 1099-R to create a new copy of the form or click Review to review a form already created 
  4. Click Quick Entry or Step-by-Step Guidance
    1. If you select Quick Entry, complete the form to match your paper copy of Form 1099-R and be sure to scroll down to complete all sections, including the section titled Qualified Charitable Distribution (QCD).
    2. If you select Step-by-Step Guidance, the program will proceed with the interview questions for you to enter or review the appropriate information. If the qualifications below are met, there will be a screen Retirement Plan Income - Special Distributions where the box can be checked if it is a QCD.  If the box is checked, further through the Q&A there will be a screen Retirement Plan Income - Qualified Charitable Distribution where the amount of the QCD can be entered.

If you are not seeing the screens in the Q&A relating to Qualified Charitable Distributions (QCD) and believe you should be, review the following qualifications:

  • The date of birth of the owner of the 1099-R has to be over 70 1/2 and must be entered in the Basic Info section of the return
  • The distribution cannot have been reported on Form CSA 1099-R or Form CSF 1099-R
  • There must be an amount in box 2a or Taxable amount not determined must be checked in box 2b
  • Either Code 7 must be reflected in box 7 of the form and no alpha code, OR no numeric code and Code T; no other codes will work
  • The IRA/SEP/SIMPLE box must be checked on the 1099-R

Provided the information has been entered correctly, the text "QCD" will automatically appear to the left of Form 1040, Line 4b. However, this will appear on the printed form only. Should this not appear on your printed form, please review your entries using the previous instructions.