What are the tax implications of taking an immediate cash distribution from a defined contribution account?
Usually, the Plan will withhold 20% of the amount requested for distribution for Federal income tax purposes. This is a withholding and should not be considered actual tax paid. At the end of the year, the Alternate Payee may receive a refund of part of this withholding or may be required to pay an additional sum depending upon the annual tax obligation of the Alternate Payee. 26. What about the interest and/or investment gains and losses that may happen from the time it is agreed that the account is to be divided until the Alternate Payee receives a distribution? The QDRO can provide that the portion of the account awarded to the Alternate Payee be credited with any interest and/or investment gains (or losses) attributable thereon from the date the account is divided until the date the Alternate Payee receives a distribution. Return to the Top FAQs for the Military Retirement System (Retired Pay Court Order) 27. Is it possible to write a QDRO against the Military Retirement System? In
