In the wake of Hurricane Matthew’s widespread devastation, 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims and their families, the IRS said.
Participants in 401(k)s, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, and state and local government employees with 457(b) deferred-compensation plans may be eligible.
IRA participants are barred from taking out loans without a tax penalty, except in special circumstances and under liberalized procedures.
Retirement plans can provide this relief to employees and certain members of their families who live or work in disaster area localities affected by Hurricane Matthew and designated for individual assistance. Parts of North Carolina, South Carolina, Georgia and Florida qualify for individual assistance.
For a complete list of eligible counties, visit www.fema.gov/disasters. To qualify for this relief, hardship withdrawals must be made by March 15.
The six-month ban on 401(k) and 403(b) contributions that normally affects employees who take hardship distributions will not apply.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access