IRS Relaxes Hardship Withdrawals Due to Hurricane Harvey

September 6, 2017

There’s good and bad in the announcement below about the IRS relaxing the loan and hardship withdrawal rules from company-sponsored 401(k), 403(b), and 457 plans. The relief is available to those who live or work in the Hurricane Harvey disaster area, and extends to some family members. The provisions even extends to IRA’s.

That’s the good.

Here’s the bad.

Loans and hardship withdrawals must be paid back within 5 years. If not repaid, the amount borrowed or withdrawn will be considered as taxable income. If you are under 59 1/2, there is a 10% penalty for the distribution if not paid back within the 5-year window.

More details are available in the article below.

https://www.financial-planning.com/news/irs-loosens-rules-for-retirement-plans-to-lend-money-to-hurricane-harvey-victims

 

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.