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IRA Distribution Tax Credit

Forum|Forum|6 years ago
December 2, 2019
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Is there a tax credit when a partial IRA distribution is directly transferred to a charitable organization?

Best answer by rjs

If you were over 70 1/2 years old at the time the distribution was made, and the IRA custodian paid the distribution directly to the charity, that's called a Qualified Charitable Distribution, or QCD. When the taxable amount of distributions is calculated on your tax return, the amount of the QCD will be subtracted from the total, so you will not pay tax on the part that was sent to the charity.

You will get a Form 1099-R showing the total distributions from your IRA for the year. After you enter the 1099-R in TurboTax and proceed through the interview, it will ask you a series of questions about the IRA distribution. You will come to a screen that says "Transfer to Charity?" On that screen, if you select "I had part of this distribution transferred to charity," the next screen will ask how much was transferred to charity. That amount will be shown as non-taxable on your tax return.

rjsAnswer

Employee

If you were over 70 1/2 years old at the time the distribution was made, and the IRA custodian paid the distribution directly to the charity, that's called a Qualified Charitable Distribution, or QCD. When the taxable amount of distributions is calculated on your tax return, the amount of the QCD will be subtracted from the total, so you will not pay tax on the part that was sent to the charity.

You will get a Form 1099-R showing the total distributions from your IRA for the year. After you enter the 1099-R in TurboTax and proceed through the interview, it will ask you a series of questions about the IRA distribution. You will come to a screen that says "Transfer to Charity?" On that screen, if you select "I had part of this distribution transferred to charity," the next screen will ask how much was transferred to charity. That amount will be shown as non-taxable on your tax return.