Obtaining Colorado Maintenance (Alimony) from a QDRO

Under federal pension plan law (ERISA), retirement plan assets can be tapped through the use of a QDRO to get maintenance (alimony) payments.

A QDRO can be used to collect Colorado maintenance even if an earlier QDRO was used to split a retirement plan for the benefit of a former spouse.

A defined benefit pension plan can be used to collect a stream of monthly maintenance payments.

A defined contribution plan is a good asset to obtain a lump sum for maintenance arrears.

This is true of the law of all states, not just Colorado.

The Tax Treatment should NOT be Similar to the Standard QDRO

Under the traditional QDRO which is used to divide martial assets, the income tax is paid by the former spouse (the Alternate Payee) who received the QDRO account, at the time that the money is withdrawn.

Under recent changes in the IRS tax law, maintenance payments are now NOT tax deductible to the payor and are NOT taxable income to the payee.

As a result, you must be careful to understand which Spouse is being taxed on the maintenance QDRO.

A maintenance QDRO is particularly effective if an arrears is owed.