What Are The Tax Effects Of A QDRO?
Posted on Mar 17, 2014 7:58am PDT
Q. Martin R. of New Mexico asks: "What are the Tax Effects of a QDRO?"
A. Spencer, from the QDRO Department of Pension Evaluators & QDROS
Of Troyan, Inc Associates Groupwrites: "Benefits paid directly to any alternate payee by a plan as the result of
a QDRO are generally included in the alternate payee's taxable income
in the year that the alternate payee receives benefit payments. Also,
benefits paid directly to an alternate payee by a plan as the result of
a QDRO are not subject to the 10% early withdrawal penalty which is generally
applicable to withdrawals from retirement accounts prior to age 59-1/2."
Spencer Olsen
Lead QDRO Analyst
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