Jump to content

QDRO processed before RMD


Recommended Posts

An owner, who has been receiving RMDs, had a QDRO distribution made from his account on 1/3/11. The paperwork to get the QDRO distributed had been submitted to the investment company before 12/31/10. We calculated his 2011 RMD on his balance as of 12/31/10, however 3 days later his balance dropped by half and now his RMD amount is a significant portion of his entire balance.

Is there any exception, in this case, to using the 12/31/10 balance to calculate the 2011 RMD? Could we subtract the QDRO distribution since the process had started before year end?

Thanks.

Link to comment
Share on other sites

  • 2 weeks later...
See Treas. Reg. section 1.409(a)(9)-8 Q&A-6 and Q&A-7

Thank you. In A-6©, it says that if the benefit was paid out of the plan to the alternate payee (which was the case) the amount distributed "will be aggregated with any amount distributed to the employee and will be treated as having been distributed to the employee for purposes of determining whether section 401(a)(9) has been satisfied with respect to that employee."

That seems to say that if the distribution to the alternate payee was more than enough to cover the RMD requirement, then no additional RMD needs to be made. Is that how you read that? If that's true, then how is the distribution reported? Does a 1099-R need to be issued to the employee for the RMD amount even though the alternate payee got the distribution? Or is there just the 1099-R to the alternate payee and the fact that a distribution occurred from the employee's account enough to satisfy the RMD requirement (no reporting required to the employee)?

Thanks.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...