I got divorced last year, and in the divorce settlement, my ex got the house and I got a lump sum distribution from his retirement account. The judge signed a QDRO and Nationwide issued the disbursement to me as the alternate payee. The amount was $36,000, and they withheld $7204 in taxes. I received a 1099-R from Nationwide and when I entered the information on the 1040, it increased my AGI by the $36,000. My question is, in the divorce decree it is stated: 'IT IS ORDERED AND DECREED that all payments made to the other party in accordance with the allocation provisions for payment of federal income taxes contained in this Final Decree of Divorce are not deemed income to the party receiving those payments but are part of the property division and necessary for a just and right division of the parties' estate.' Does that mean the disbursement I received should not be counted as income? Or do I enter the amounts exactly as on the 1099-R and leave it as is? Thank you!

March 4th, 2023

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