Tax Relief for Hurricane Victims (Plan Loans and Hardship Distributions)
The IRS will permit 401(k) plans, 403(b) plans, and certain other qualified plans to make plan loans through more streamlined procedures and hardship distributions under liberalized rules to participants and their family members who lived or worked in disaster areas that were impacted by Hurricane Harvey and Hurricane Irma, so long as those disaster areas were among those listed as eligible for individual FEMA assistance. This should help hurricane victims by making it easier to access money in their retirement plan accounts, if needed. However, employers and plan participants should be reminded that the normal tax rules for loans and hardship distributions from qualified plans remain unchanged.
For a more detailed discussion of the IRS relief, please see our client alert here.