My ex-wife will receive approx. 1/2 of my pension as a lump sum check. 20 is witheld for federal taxes no 10 percent penalty for divorce. After 20 witheld for taxes, is the 80 remaining of the lump sum considered taxable income for her?

The divorce agreement QDRO is for my ex wife to receive no less than 200K from my pension. I must submit the QDRO as a percentage of my pension’s current value. Today I would have to request approx. 40 of my pension be set aside as a lump sum for her, based upon the 20 witheld for federal taxes. There is no additional 10 penalty in case of divorce. The question though is… Is the 200K lump sum she will receive considered taxable income for the year she receives the lump sum? I ask because she is considering balking at the 200K agreement if she is faced with a much higher than normal taxable income, and may want me to increase the amount in the QDRO to pay for any increase in her taxes.

Thank you.

Asked on January 23, 2018 under Family Law, Washington


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

PLEASE GET HELP!  Do NOT do these calculations alone.  A withdrawl from a pension plan pursuant to a divorce is not considered a taxable event.  So I am unsure what you are doing here and what you are agreeing to.  The QDRO can generally only be submitted after the divorce documents are finalized and must be approved by the plan administrator prior to the funds being withdrawn.  Please get some advice here asap.

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