The QDRO gives the participant’s spouse a percentage of the participant’s contract investment, with the numerator being the present value of the spouse’s benefits and the denominator being the present value of all participant benefits. After the distribution, the former spouse is accountable for any taxes that are owed. Alternatively, the former spouse can roll over the assets acquired via a QDRO in the same way that an employee can roll over a distribution into another retirement account. A QDRO payout paid to a dependent, such as a kid, is, on the other hand, taxed to the plan’s participant. If there is no QDRO in place and the account holder transfers retirement plan assets to the former spouse, the account holder is responsible for the taxes on the assets transferred.
