Have a Tax Question? Ask a Tax Expert
If it is pre-tax retirement savings, then any distribution will be taxed to either him or you unless it is rolled over to and IRA account. Usually it is taxed to the recipient (you). If you receive the distribution due to a QDRO (qualified domestic relations order), you will not be subject to the 10% penalty.
There is really no way to reduce your tax if you plan on using the proceeds to buy a house. Hopefully, you will get some additional deductions on the home purchase.
Thank you for your question. Feel free to Reply with any additional concerns.
Yes, you should be able to have the Thrift plan send the distribution directly to a new Rollover IRA account that you set up ahead of time. This will have no tax consequences, other than reporting it as a rollover on your tax return. Keep in mind that once the money is in the IRA, if you are under 59 1/2, any withdrawals will be subject to income tax AND a 10% penalty.
If the plan cuts you a check, they will be required to withhold taxes.
The best thing, of course, would be to roll the funds over to an IRA, and leave it until you retire. It will be costly to take early withdrawals.
I hope this is helpful. Let me know if you have any more questions,
You're welcome. I'm sure this is a stressful time, and taxes are just an added stressor.