Q: I retired and got $114000 payout to a 401A and $46000 to me taxed 24%. My exwife gets $62000. Case law for who pays tax?
Our settlement reads, "The Wife shall receive one-half of value of the 1,536 sick leave hours and 480 annual leave hours, with the value of such hours being determined at the time of payment, upon the earlier of Husband's retirement or his departure from the School District of Palm Beach County." That amounts to $62,000 for her. She is insisting that I pay the tax on the direct pay and the 401A withdrawal, then pay her $62,000 and she pays no tax. Is there Florida case law re. this? She set the mediation date for April 16, knowing that I will have paid tax on the $46,000 distribution before the mediation.
A: The legal issue is how did you receive the vacation and sick pay. Did it come to you directly or did it go to an account that was then taxed. If the payout was taxed then former wife should be responsible for half the tax on that specific payout. Unfortunately the quote that you provided could be considered ambiguous which is why you are fighting about it.
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