QDRO

Renee
Renee Member Posts: 5 Newcomer
in Live Q/A Event

How does it work filing with a QDRO? Does that amount add onto my employment income? I was already taxed and/or charged a fee/penalty when I withdrew the funds. I’m just trying to figure out how much I will be paying..

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Answers

  • KristineS
    KristineS FreeTaxUSA Agent Posts: 177

    Hi Renee,

    Thanks for joining our Live Event today!

    A QDRO, or Qualified Domestic Relations Order, is not a taxable event to your tax return. Most often a QDRO involves a transfer of retirement money. The transfer itself is not a taxable event.

    However, when you withdraw money from the retirement account, that becomes a taxable event as you described. The withdrawal becomes income on your tax return, which will raise tax. It is added to your tax return just like all other income including unemployment income, bank interest, etc.

    Retirement money is not considered Earned Income.

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  • Renee
    Renee Member Posts: 5 Newcomer

    fantastic. Thank you!

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