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qdro transfers within the plan


Guest lindamichals

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Guest lindamichals

husband/wife owners in same plan divorced and qdro issued. husband's amount transferred to wifes account balance. No 1099R issued, correct? Thanks.

Linda

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That is not the correct accounting. If you commingle, you will not be able to determine the QDRO amount for various purposes, including distributions and 401(a) (9). Maybe that will be irrelevant as things play out, but what will you do if the alternate payee (still employed and age 50) requests a distribution in a few years?

No 1099 for establishing an account for the QDRO proceeds.

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It depends on what the QDRO and plan say. If the QDRO says she gets an immediate distribution, and if the plan permits a rollover contribution, then she gets a 1099R for the rollover.

If the QDRO says or permits a deferral of distribution, and she does defer the distribution, then follow the plan which probably gives her a QDRO account. In that case it is the same as for any other QDRO. She should have two accounts though.

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  • 4 months later...

If the money stays in the same plan, is this related rollover for purposes of top heavy testing?

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No, it is just a portion of the participant's account that is treated differently once it becomes time to distribute and possibly as to who has investment authority over it in the meantime. But it is still treated as the participant's for TH purposes.

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