Publication 504
taxmap/pubs/p504-003.htm#en_us_publink1000176019A qualified domestic relations order (QDRO) is a judgment, decree, or court order (including an approved property settlement agreement) issued under a state's domestic relations law that:
- Recognizes someone other than a participant as having a right to receive benefits from a qualified retirement plan (such as most pension and profit-sharing plans) or a tax-sheltered
annuity,
- Relates to payment of child support, alimony, or marital property rights to a spouse, former spouse, child, or other dependent of the participant,
and
- Specifies certain information, including the amount or part of the participant's benefits to be paid to the participant's spouse, former spouse, child, or other
dependent.
taxmap/pubs/p504-003.htm#en_us_publink1000176020Benefits paid under a QDRO to the plan participant's child or other dependent are treated as paid to the participant. For information about the tax treatment of benefits from retirement plans, see Publication
575, Pension and Annuity Income.
taxmap/pubs/p504-003.htm#en_us_publink1000176021Benefits paid under a QDRO to the plan participant's spouse or former spouse generally must be included in the spouse's or former spouse's income. If the participant contributed to the retirement plan, a prorated share of the participant's cost (investment in the contract) is used to figure the taxable amount.
The spouse or former spouse can use the special rules for lump-sum distributions if the benefits would have been treated as a lump-sum distribution had the participant received them. For this purpose, consider only the balance to the spouse's or former spouse's credit in determining whether the distribution is a total distribution. See
Lump-Sum Distributions in Publication
575 for information about the special rules.
taxmap/pubs/p504-003.htm#en_us_publink1000176022If you receive an eligible rollover distribution under a QDRO as the plan participant's spouse or former spouse, you may be able to roll it over tax free into a traditional individual retirement arrangement (IRA) or another qualified retirement
plan.
For more information on the tax treatment of eligible rollover distributions, see Publication
575.