For 2010 QDROs have a special option for Roth conversions! QDRO stands for a Qualified Domestic Relations Order and is an order in which an alternate payee is recognized to receive all or a portion of the benefits payable of a related party’s retirement plan. An alternate payee is any of the following: a spouse, former spouse, child or a dependent of the participant. QDRO usually form from a divorce or soon to be divorce.
This year many questions regarding the special option for Roth roll over and QDRO relationship are being asked to financial planners and divorce attorneys, especially. The answer to the question is that for payments from a plan during 2010 that are rolled over to a Roth IRA, the taxable amount will be split over the two years of 2011 and 2012 unless elected to all be taxed in 2010. So if getting a divorce this year – you are in luck!