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January 30, 2020
Question

I pulled money out of my IRA for a cash gift. I had fed tax withheld. Since it was gift money, I should not have paid fed taxes, how do I correct that in my tax return?

  • January 30, 2020
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Employee
January 30, 2020

If you were over age 70½ and this was a gift paid directly to a charity by your IRA custodian, in the questions that follow entry of the Form 1099-R indicate that you had the custodian transfer the money to charity and indicate the amount transferred.  TurboTax will include the distribution on Form 1040 line 4a but exclude the amount transferred to charity from the amount on line 4b.  TurboTax will also include the notation "QCD" next to the line, indicating that you made a Qualified Charitable Distribution.

 

If you did anything else, the distribution is taxable and potentially subject to an early-distribution penalty.  If you received a distribution of cash and you later made a charitable contribution you can claim the charitable contribution on Schedule A.  If you took money out the IRA and just gave it to someone else it is neither nontaxable nor a charitable contribution.

 

Any amount shown in box 4 of the Form 1099-R will be credited toward the overall tax liability determined on your tax return.