QDRO and Roth 401k
Any resources/information for how Roth 401k assets are taxed to receiving ex-spouse who is pre-59 1/2 if they want to take distribution?
I read where it is subject to the same distribution ordering rules, and just want to confirm with the gurus!
Thank you!
Permalink Submitted by Alan - IRA critic on Wed, 2023-09-13 17:44
Roth 401k plan distributions are not subject to the ordering rules of a Roth IRA. Any gains in the Roth 401k are apportioned pro rata to the sub account of the alternate payee, and any distribution allowed to the alternate payee will include a pro rated amount of contributions and gains. However, the QDRO exception to the early distribution penalty will waive that penalty for pre 59.5 distributions. The penalty exception can be claimed on Form 5329 using exception code 06, if the 1099R shows code 1.