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 Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. information in the program:
- From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
- Click Retirement Plan Income in the Federal Quick Q&A Topics menu to expand, then click IRA, 401(k), and pension plan distributions (Form 1099-R).
- Click + Add Form 1099-R to create a new copy of the form or click Edit to review a form already created.
- Click Quick Entry to complete the form to match your paper copy of Form 1099-R; or click Step-by-Step Guidance to proceed with the interview questions for you to enter or review the appropriate information.
- On the screen titled Retirement Plan Income - Special Distributions, check Qualified Charitable Distribution (QCD), then click Continue.
- On the screen titled Retirement Plan Income - Qualified Charitable Distribution, enter the QCD amount, then click Continue.
If you are not seeing these 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 Form 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 2a. Taxable amount or 2b. Taxable amount not determined is checked.
- Either code "7-Normal distribution" must be selected in 7. Distribution code and no alpha code, OR no numeric code and only code "T-Roth IRA distribution - exception applies" is selected - no other codes will work.
- The 7. IRA/SEP/SIMPLE box must be checked on Form 1099-R.
Provided the information has been entered correctly, the text "QCD" will automatically appear to the left of Form 1040 U.S. Individual Income Tax Return, 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.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.