As an experienced Saratoga Divorce Attorney, clients often ask me about the tax consequences of receiving half of your spouse’s deferred compensation plan.
- Parties are entitled to receive their marital portion of a deferred compensation plan with no tax consequences attached to its actual distribution because it’s a transfer incident to the divorce.
- As the qualified moneys they are, funds take the form of an IRA or 401K – depending on the deferred compensation plan.
- Tax consequences and penalties accrue for early withdrawal after receipt of the marital distribution, so it is wise to speak with a tax adviser beforehand.
Are you worried about the tax consequences of receiving part of your ex’s compensation plan? Contact dedicated Saratoga Divorce Attorney Katrin Falco for guidance.