A qualified charitable distribution (QCD) is an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70½ or more at the time of the distribution that is paid directly from the IRA to a qualified charity.
Up to $100,000 of QCDs from an IRA reported on Form 1099-R can be excluded from income. For a couple filing MFJ, each spouse can exclude up to $100,000.
In TaxSlayer Pro, entering a QCD is a two-step process:
- Enter the 1099-R.
- Indicate the return includes a QCD.
To enter a QCD in TaxSlayer Pro, from the Main Menu of the tax return (Form 1040) select:
- IRA/Pension Distributions - Select New and enter the Payer’s Information.
- In Box 1, enter the gross distribution as shown on the Form 1099-R.
- In Box 2, enter the difference between the gross distribution and the amount of the QCD. If the entire distribution was a QCD, enter $0. You'll be asked if all or part of the distribution was rolled over, i.e., into another retirement plan. Answer No unless the taxpayer also rolled some portion of the distribution into another retirement plan (this would be unusual).
- You'll be asked if the 1099-R is from an IRA, SEP, or SIMPLE. Answer Yes.
- Enter the distribution code and any other items reported on the 1099-R.
- Exit the 1099-R entry window and in the Form 1099-R menu select the Other button.
- Select IRA Qualified Charitable Distribution, then select YES in answer to the question.
Having done the above steps, the taxable amount entered in Box 2a, if any, will flow to Form 1040, Line 4b. When printing the 1040, the abbreviation QCD will display at the bottom of page 1 explaining why the taxable amount is less than the gross distribution.
Note: This is a guide to entering Qualified Charitable Distributions into the TaxSlayer Pro program. This is not intended as tax advice.