QADRO to IRA and then to 401K
Have a client who is receiving QADRO from Spouse to her IRA and then wants to transfer/rollover to her current Employers 401K. Does the one year rollover rule in effect with these transactions?
Have a client who is receiving QADRO from Spouse to her IRA and then wants to transfer/rollover to her current Employers 401K. Does the one year rollover rule in effect with these transactions?
Permalink Submitted by Alan - IRA critic on Wed, 2023-01-11 20:45
No. Rollovers between qualified plans and IRAs are not subject to the one rollover limit. A QDRO is done on a qualified plan and if rolled over to an IRA it should be by direct rollover to avoid withholding, and this transfer also erases the penalty exception for distributions to client as the QDRO penalty exception does not apply to IRA distributions or from the new 401k plan. Of course, if client is over 59.5 these penalty exceptions are moot.