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https://www.irs.gov/pub/irs-dft/i1099r–dft.pdf
Thanks to HD for fixing the problem in the link.
On April 15, 2025 the IRS issued draft instructions for the 2025 version of form 1099-R with a new box 7 code of “Y” to indicate the distribution is a qualified charitable distribution (QCD).
A good addition in my opinion.
Update 8/22/2026-
Denise Appleby at Morningstar had a 8/21/2026 article titled “The New QCD (Qualified Charitable Contribution) Reporting Rule Raises a Big Question for IRA Owners”. I recommend reading her article if you plan to make a QCD from your traditional IRA in 2026 or later years.
The key statement in the Morningstar article for me is “The unresolved question is whether a check signed by the IRA owner but drawn directly on the IRA and honored by the IRA custodian satisfies the statutory requirement that the distribution be made directly by the trustee.”
My broker, Vanguard, permanently discontinued check-writing services for all IRA accounts on September 24, 2025 thus the Morningstar unresolved question of what will they do is solved for me should I make a QCD.
My expectation is if you are able to write a QCD check to a charity from your traditional IRA and your IRA custodian does nor code your 1099-R with a “Y” then it seems likely to me that you are inviting eventual correspondence from the IRS and a administrative headache on this issue.
This simple article is one of my favorites as it had a reply from Jonathan one year ago where he both fixed a mistake I made on an embedded link and helped me understand how to not make the same mistake again.
The article at Morningstar explains the current status of QCD donations made by IRA account check-writing.
It could not be timelier for us since we are making our QCD donations for 2026 this very week. We write checks drawn on my IRA account. The only difference this year is that the QCDs will also count toward my RMD since this is also my first RMD year. We enabled check-writing on this account specifically to do QCDs, and the IRA checks are only used for for QCDs. Distributions for my RMD or other purposes are handed by direct IRA transfers to our brokerage account.
We make sure that all the requirements for a QCD donation are met. Our QCD spreadsheet includes the tax ID for every organization, which we have verified to be a 501c3. And certain non-501c3 governmental/educational institutions (such as state universities) also qualify.
As the donation receipts are received we verify that they also meet the QCD requirements.
Everything seemed fine, until code Y came along. The Morningstar article describes better than I can the various issues code Y triggers.
Our plan is to ignore code Y unless there is additional clarification. As we did last year we will document everything and hand our tax preparer our QCD files and let them handle it.
It is disappointing that more than a year after code Y was announced that “tax experts” are not able to provide clear and objective guidance but can only offer opinions.
Here is a link to the 2026 draft 1099-R instructions dated Jun 17, 2026 wherein the IRS writes, on a preliminary basis, the following –
…unexpected issues occasionally arise, or legislation is passed—in this case, we will post a new draft of the form to alert users that changes were made to the previously posted draft…
Code Y for box 7a on Form 1099-R. We added code
“Y” to the list of codes for box 7a to identify a qualified
charitable distribution (QCD). See Qualified charitable
distributions (QCDs), later.
For tax year 2026, the use of code Y to report a QCD
is optional. If you are completing and filing a 2026 Form
1099-R, you may choose, but are not required, to enter
code Y in box 7a.
It is difficult to provide timely, clear and objective guidance when the agency who interprets the laws passed by congress and writes the detailed regulations have not finalized their rules for the tax year we are more than halfway through. My intent in this updated post was to encourage using a direct from IRA custodian to charity method for those who are making qualified distributions to avoid potential tax compliance headache for you and your tax preparer. I do not have any idea if your broker will choose to use code “Y” regardless of the method of how the QCD is distributed.
Thank you, William, for this update. I value your recommendations and have saved the article to my tax file. Being just two years away from my