A qualified domestic relations order (QDRO) (pronounced quad-row or cue-dro) is a judgment, decree, or order for a retirement plan to pay child support, alimony or marital property rights to a spouse, former spouse, child, or other dependent of a participant. The QDRO is often included in a divorce decree or marriage settlement agreement (MSA) and must contain certain specific information, such as:

• the participant and each alternate payee’s name and last known mailing address, and

• the amount or percentage of the participant's benefits to be paid to each alternate payee.

A QDRO may not award an amount or form of benefit that is not available under the plan.

A spouse or former spouse who receives QDRO benefits from a retirement plan reports the payments received as if he or she were a plan participant. The spouse or former spouse is allocated a share of the participant's cost (investment in the contract) equal to the cost times a fraction. The numerator of the fraction is the present value of the benefits payable to the spouse or former spouse. The denominator is the present value of all benefits payable to the participant.

A QDRO distribution that is paid to a child or other dependent is taxed to the plan participant.
An individual may be able to roll over tax-free all or part of a distribution from a qualified retirement plan that he or she received under a QDRO. If a person receiving QDRO payments is either the employee's spouse or former spouse (not as a nonspousal beneficiary), then he or she can roll it over, just as if he or she were the employee receiving a plan distribution and choosing to roll it over.

In Nebraska, a Qualified Domestic Relations Order (QDRO) is a legal order that is part of a divorce decree or marriage settlement agreement, which allows for the distribution of a retirement plan's benefits to pay for child support, alimony, or marital property rights to a spouse, former spouse, child, or other dependent. The QDRO must include specific information such as the names and addresses of the participant and alternate payee(s), and the amount or percentage of benefits to be paid. It cannot award benefits not provided by the plan. Spouses or former spouses receiving benefits under a QDRO are taxed as if they were plan participants, and they may roll over the distribution into another qualified plan tax-free, similar to the original participant. Distributions to children or dependents are taxed to the plan participant. Nebraska state law aligns with federal regulations regarding the treatment of QDROs, ensuring that retirement benefits are properly divided and that tax implications are consistent with federal tax rules.