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Returning Member
posted Jan 27, 2021 11:14:25 AM

QDRO for a Thrift Saving Plan

As the QDRO beneficiary (divorce decree) , of a lump sum of a Thrift Savings Plan (government plan). How many times is this income penalized/taxed? 

 

At withdrawal,  the total sum was penalized by 10-20% for early withdrawal. Now, after the 1099 is issued, will the sum be taxed again as income tax? What about section 72(t)(2 (C)

https://www.law.cornell.edu/uscode/text/26/72

 

 

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1 Replies
Expert Alumni
Jan 27, 2021 2:18:31 PM

Yes, there will be a income tax levied as well as an early withdrawal penalty. These are two separate events. Now if the trustee withheld taxes from your gross proceeds, this will appear in Box 4 of your 1099 and you will be credited with income taxes for this distribution. Please view this IRS link for further details.