What documentation should IRA custodians and charities provide to prove a QCD satisfied an RMD?
Executive summary
To prove that a Qualified Charitable Distribution (QCD) counted toward a taxpayer’s Required Minimum Distribution (RMD), IRA custodians should supply clear distribution records (including Form 1099‑R with Code Y when available), custodial instruction and transfer confirmations, and timestamps showing the trustee‑to‑charity transfer was completed by December 31; charities should provide contemporaneous receipts showing the payee, date received/cashed, amount, and their EIN or official acknowledgment of the gift. The IRS added a dedicated QCD reporting indicator (Code Y in Box 7 of Form 1099‑R) to simplify proof, but the code was optional in 2025 and custodial procedures and charity receipts remain essential backup documentation [1] [2] [3].
1. What the law and custodian reporting now can — and cannot — show
The IRS introduced a specific Code Y on Form 1099‑R to identify distributions that qualify as QCDs, which should make it easier for custodians to flag a distribution as a QCD and for the IRS to match taxpayer returns to trustee reporting; in 2025 use of Code Y was optional and custodians must still update systems and procedures to support the new code [1] [2]. Even with Code Y, custodians remain responsible for documenting that the distribution was payable to and actually transferred to a qualified charity and for showing dates that the funds left the IRA so the transfer meets the December 31 deadline to count toward that tax year’s RMD [1] [4].
2. Custodian documentation that proves a QCD satisfied an RMD
Custodians should provide a contemporaneous transfer instruction or beneficiary request showing the owner’s direction to make a trustee‑to‑charity transfer, a transaction confirmation or settlement record reflecting the date and amount sent to the charity, and the Form 1099‑R reflecting the distribution with Code Y when applicable; those pieces together show intent, execution, and tax reporting alignment [3] [1] [2]. When transfers are made by check mailed to the charity or the owner, custodians should also retain mailing logs, check images, and any Medallion Guarantee or internal approvals required to send checks directly to a charity, because practice varies and delays can affect whether the QCD counts for the year [5] [6].
3. Charity documentation that validates the transaction
A qualified charity must provide an acknowledgment or receipt that clearly states the charity’s legal name, its EIN, the amount received, the date the charity received or cashed the funds, and an explicit statement that no goods or services were provided in exchange — this confirms the gift was eligible and unencumbered for QCD treatment [3] [4]. Best practice is for charities to issue a written substantiation on their letterhead or via an electronic acknowledgment contemporaneous with deposit or cashing of the check, because several custodial guides and fiduciary advisors recommend that charities ideally cash QCD checks by December 31 to ensure the RMD is satisfied for that tax year [5] [7].
4. Timing and operational realities that can undermine documentation
Even with perfect paperwork, timing snags—checks mailed to the IRA owner, processing delays, or differences in when a charity considers a gift “received” versus when funds clear—can create disputes over which tax year the QCD applies to; custodians and donors are therefore urged to start QCD processing well ahead of year‑end and to obtain charity proof of receipt to avoid that risk [5] [8]. Also, because Code Y implementation was optional during its first year, taxpayers should not rely solely on 1099‑R coding in early transition years and must keep custodial and charity records as primary proof [1] [2].
5. Where practitioners disagree and hidden incentives to watch for
Custodians may prefer mailing a check to the IRA owner for practical reasons, leaving the donor responsible for forwarding it — a practice that raises the risk the QCD won’t meet the year‑end deadline and shifts evidentiary burden to the donor and charity [5] [6]. Charities and custodians also have divergent operational incentives: custodians seek standardized processes (and may rely on new codes), while charities may lack resources to issue detailed acknowledgments promptly; donors should insist on both sides’ confirmations because relying on a single party’s statement can be risky [2] [3].
6. Practical checklist and limits of available reporting
In practice, a defensible QCD that satisfies an RMD should be documented by: the custodian’s transfer instruction and transaction confirmation showing trustee‑to‑charity movement and date, Form 1099‑R reflecting the distribution and Code Y when present, and the charity’s contemporaneous receipt with legal name, EIN, amount, date received/cashed, and statement of no goods/services given; if any of those items are missing, taxpayers and preparers should retain substitute proof (check images, bank statements showing charity deposit) because reporting rules and operational habits vary and some specifics (for example, IRS enforcement thresholds beyond Code Y) are not fully detailed in these sources [1] [3] [5].