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Order Transfers IRA Pursuant to a Divorce -- Early Distribution Penalty Applies?
BenefitsLink Message BoardsLink to more items from this source
Dec. 1, 2021

"H and W divorce. Both are under 59-1/2. H is awarded $11,000 from W's IRA. He does not intend to roll it over. An Order Transferring IRA Incident to Divorce (similar to a QDRO) is drafted, signed by H and W and approved by the court.

If this were a distribution from a qualified plan under a QDRO, H would include the distribution in his income but would not be subject to the 10% early withdrawal penalty. Question: Is H subject to the penalty tax here?"

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