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Is a divorce settlement considered a lawsuit settlement

I receive a payment from my ex-husband's retirement income. It was called an "assignment of interest" in the divorce.
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1 Reply
MinhT1
Employee Tax Expert

Is a divorce settlement considered a lawsuit settlement

Yes. This amount is taxable.

 

The IRS says:

 

If you receive payments under a QDRO, you must include them in income unless you roll them over into a traditional IRA and meet certain conditions. Amounts included in income are not subject to the 10% early distribution tax.

 

Please read this IRS document for more information.

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