Dividing Retirement Accounts in Divorce: how each account divides
2026 law · reviewed September 7, 2026
| Account | Divided by | Tax to the recipient | Before 59½ |
|---|---|---|---|
| 401(k), 403(b), pension | Qualified domestic relations order | Ordinary income when withdrawn | No penalty on a distribution under the order (§ 72(t)(2)(C)) |
| Traditional IRA | Transfer under the divorce instrument (§ 408(d)(6)) | Ordinary income when withdrawn | 10% penalty applies to the recipient |
| Roth IRA or Roth 401(k) | Transfer or order | None, if qualified | Contributions free; earnings and young conversions penalized |
| Brokerage account | Transfer (§ 1041), basis carries over | Capital gain on the built-in gain when sold | No penalty |
Retirement and investment accounts in a divorce: the instrument, the tax, and the early-withdrawal rule (§§ 1041, 408(d)(6), 414(p), 72(t)).
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