X and I had a Qdro done. The Qdro states a certain amount of money had to be extracted from his 401k and given to me as an alternate payee. The court ordered when I get the funds I need to use it to pay off the house mortgage. I filled out the QDRO paperwork with the 401k company. One of the pages I had to sign was an election NOT to have taxes with held. ALSO in the paperwork from the 401k company it stated that income tax does NOT apply to payments made under a QDRO. I received the check yesterday and they withdrew taxes. Now I don't have enough money to pay off the mortgage as the court ordered. Is this a mistake on their part? All of the documents they sent and had me sign left "us" with the understanding that taxes NOT be withheld.

If the funds were taken out before this matured then they were correct about taking out the taxes. Why not call them up and ask them exactly what's going on or have your attorney contact them and get back to you with their explanation. Someone HAS to pay the taxes on this money, or did you somehow think you are exempt from any taxes?

I didn't think I was exempt even though the paper they sent me stated I was. It stated I jad the option to NOT have taxes withheld and I would have to deal with it around tax time. The reason whi I wanted to deal with the taxes at tax time is because I have a 40 thousand dollar tax credit that could be applied.

Generally the tax issue is dealt with right then and there by the company distributing the funds.

Next was it the actual taxes, or was it merely a penalty, perhaps 10 percent ? But if they held taxes out, and the paper work filed said not to withhold taxes, then you need to address this with them, normally though the attorney

Thanks... I don't have an attorney and can't afford one. Me and my 4 kids live off food pantries until we start getting child support. I am not employed because I adopted 4 special needs kids that require A LOT of services and therapy appointments. Nobody would EVER hire me with all the time I would need off. I am in the process of trying to start my own business to find a flexible way of obtaining an income. I may be getting a paid off house eventually... but the past 2 years have been hell for the 5 of us. I look forward to the day I can go to the market and actually feed my kids healthy food and NOT have an empty fridge all of the time. Sounds like HIS attorney underestimated the withdrawal amount because it was supposed to cover the entire buy out amount of the mortgage. I am still going to call 401K company but he needs to find a way to follow through with the court order. I am assuming he will need to do another 401k transfer. He has a VERY large 401k in which I did not get half. The agreement was the right amount of money be withdrawn to pay off the home. Once home is pad off child support will begin.

You obviously had an attorney or you would not have reached such a complicated settlement. You should be able to collect money from welfare and food stamps as you sound like you qualify. Why aren't you doing this? Don't quite understand how you could pay electricity, phone, internet bills through food pantries. You have to have some sort of financial help from somewhere - and not just your ex. How can you start your own business if you have no money?
Does not matter how large his 401K is, you are only entitled to what the judge ordered. If there is not enough to pay off the home, you can set down a hearing before the judge and request the additional money it would take to fully pay off your home AND that taxes and penalties be paid for by your ex. I see no other way.

I didn't have an attorney at all. I had to go Pro Se. Legal aid didn't want to take on the case due to its complexity and VERY long wait list. This agreement was what the x offered through his attorney so the children could have a place to live and not disrupt their lives. He wanted to pay off the house and transfer the deed to me. The court ordered that this had to be done in thirty days. It has now been over two years.

I live off a very TINY adoption subsidy that pays the necessary bills. We do not have cable... I use pay as you can internet service... my phone communication is provided by safe link and luckily I get heat assistance to heat my home. Food stamps only gives $50. Not enough for a family of five. Thankfully my children receive free lunch at school. I have sold all of my belongings such as jewelry and metals so I can pay my back bills and provide macaroni and cheese for my kids and make sure the electricity stays on. For the past 2 years ALL of my children's Christmas gifts were donated through various charities. I no longer can drive my car because I can't afford the car insurance therefore I take public transportation with my four children or get rides. I have sold all I can and have nothing left that's of value. Through the love and support of friends I have gotten donations of clothing and various much needed items. I am not eligible for welfare since I have some form of income coming in even though it doesn't completely fill our needs. In my freezer I have one small ham and a pack of old chicken... I have pictures to prove it. My girls are drinking water because I don't get my small subsidy until Friday.

The business I have started has basically no start up costs. It's a pet boarding service I run out of my home. Clients bring their own supplies. Through free internet advertising and word of mouth, I am hoping to build up enough clientele to provide my kids with a better life, pay off debt and put food on the table. I have a friend who made flyers for me to hand out at local establishments. I just want the court order to be completed as requested. I HAVE to get child support soon. I am running out of resources and my kids are hungry.

If you had rolled the QDRO distribution from your ex's 401(k) to an IRA or to your own 401(k) then it would be tax-deferred. But you didn't do that - you took a distribution to pay off a mortgage instead. So the distribution is taxable, and whomever suggested that no taxes would be due was mistaken. You should have calculated the amount of tax that would be due, and increased the amount of the QDRO accordingly.