You Asked Us - Early Distribution Penalty ( QDRO)

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Q: I received some IRA assets from my former spouse as part of a divorce settlement. These amounts were transferred to an IRA in my name and social security number. I know that under the Qualified domestic relations order (QDRO) rules, my distributions from such amounts under a qualified plan would be penalty free. Can I apply the same rule to an IRA?

A: No. The QDRO early distribution exception does not apply to IRA assets. Therefore, any distributions that you take from the IRA before you reach the age of 59 ½ will be subject to the early distribution penalty, unless you qualify for another exception.

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