1099-R’s have been issued and you likely have started to receive them in the mail. We wanted to provide clarification on how custodians report QCD’s (qualified charitable distributions).
Custodians do not report the QCD on the 1099-R. The form 1099-R reports the total distribution from the IRA, but the form does not specify that part was a tax-free transfer to charity. The full distribution will appear as taxable.
It is you – the taxpayer’s – responsibility to report on your tax return that a QCD was executed, and if you use an accountant, be sure they let him or her know.
To report a qualified charitable distribution on your 1040 tax return, you generally report the full amount of the IRA distribution, including the QCD, on the line for IRA distributions (4a). On the line for the taxable amount (4b), enter the net taxable amount after the qualified charitable distribution. Enter “QCD” next to this line to identify why there is a difference.
Caption: $15,000 IRA distribution with $5,000 to charity (QCD), net taxable of 10,000