QDRO Rollovers
Total distributions from a QDRO are not subject to the 10% early withdrawal penalty. But if the spouse receiving the QDRO rolls over the balance, and then takes annual distributions, not SEPP’s, are the payments still exempt from the penalty?
Permalink Submitted by David Mertz on Tue, 2019-06-25 17:14
Only distributions to an alternate payee from the account subject to the QDRO qualify for the QDRO exception. Distributions from the account to which the distribution is rolled over do not qualify for this exception because the receiving account is not making distributions to an alternate payee under a QDRO, it is making distributions to the account participant/owner. The QDRO exception never applies to distributions from an IRA.