Can I deduct my Qualified Charitable Distribution from my IRA?

Some taxpayers may want to transfer some funds from their IRA to an eligible charitable organization.

If you qualify for this type of Charitable Contribution, then your IRA Distribution will be nontaxable. In this case you will not include these contributions under your Itemized Deductions for Contributions to Charity.

What are the qualifications for a Charitable Distribution from my IRA?

• If you own the IRA, you must be age 70 1/2 or older when you make the distribution.
• The one making the donation must transfer the money directly to the tax-free organization.
• The maximum amount of the donation is $100,000. For returns filing Married Filing Jointly, each spouse can exclude up to $100,000, each.
• Donations from SIMPLE IRA's or SEP Plans are not eligible.
• The funds must be coming directly from the IRA owner to the charity.
• The funds donated are not taxable and there is no deduction for the funds given to the charity unless nondeductible contributions are transferred.
• Charities such as donor-advised funds and supporting organizations are not eligible.
• If a nondeductible contribution is transferred to a charity, a charitable deduction may be allowed if you itemize.

Additional information about qualified charitable distributions can be found in Publication 590-B, Distributions From Individual Retirement Arrangements.

How to enter a Charitable Distribution from my IRA into my account?

To enter a 1099-R with a Qualified Charitable Distribution (QCD) within the program, go to: 

1. Federal
2. Income - Select my forms
3. 1099-R, RRB, SSA
4. Add or edit a 1099-R
5. In box 2a, subtract the amount that was a QCD from the Gross Distribution (box 1)
6. Once your 1099-R is complete, click 'Continue' to save, and go to Nontaxable Distributions
7. Check here to mark this as a Qualified Charitable Distribution (QCD) on your return
8. Complete Form 8606, Nondeductible IRAs, if:
   • you made the qualified charitable distribution from a traditional IRA in which you had basis and received a distribution from the IRA during the same year, other than the qualified charitable distribution; or
   • the qualified charitable distribution was made from a Roth IRA.
   • Form 8606 can be found in the
     • Federal
     • Deductions - Select my forms
     • Adjustments to Income
     • Nondeductible IRA's Form 8606

Links: IRA FAQ and Charitable Contributions