QCD Distribution in 2022 reduce RMD in 2023

Submitted by Jessica DeBold on Fri, 2023-01-13 13:50

The scenario is that a client believes that a QCD that was processed and distributed in late 2022 should count toward the RMD requirement for 2023. 2022 was not this person’s initial RMD, turned 72 in 2020. We have provided some resources but nothing that we have found is definitive enough for this client. Please drop any resources that you know of that might help provide definitive guidance in this situation. Thank you!



Submitted by Alan - IRA critic on Fri, 2023-01-13 16:06

  • A QCD is an IRA distribution just like any other, and will be reported on the 1099R along with other distributions made each calendar year. There are no special reporting exceptions for QCDs. Even if this occurred in the first RMD distribution year where client could have deferred the RMD to 4/1 of the following year, a 1099R will reflect distributions actually made in each calendar year including a QCD check dated in such year. Further, if client did not even deliver the check to the charity until January, that would not change the distribution year, but it would eliminate QCD treatment entirely  because the donation would not qualify as made in 2022. Client could not claim a QCD for either year in this case, but could include the donation in their itemized charitable deductions for 2023.  QCD checks should not be ordered very late in the year unless client will be able to at least deliver the check in the same year or have it postmarked in that year.
  • It is possible that client now plans to take the 2023 RMD with or without a 2023 QCD. For example, if client completes the 2023 RMD and decides to treat the 2022 check as if it was written in 2023 and reports a 2023 QCD to reduce 2023 taxable income, if the IRS audits the client and determines that the check was not issued in 2023, the 2023 QCD would be disallowed.

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