The IRS has announces that it will allow taxpayers who have been adversely affected by Hurricane Sandy to take hardship distributions or loans from their retirement plans.
To qualify for this, hardship distributions made on account of a hardship resulting from Hurricane Sandy must be made on or after Oct. 26, 2012, and no later than Feb. 1, 2013.
A qualified employer plan will not be treated as failing to satisfy any requirement under the Code or regulations merely because the plan makes a loan or a hardship distribution for a need arising from Hurricane Sandy to an employee or former employee whose principal residence on Oct. 26, 2012, was located in one of the counties or Tribal Nations that was affected. The relief also applies to employees whose place of employment was in one of these counties or Tribal Nations on that date or whose lineal ascendant or descendant, dependent, or spouse had a principal residence or place of employment in one of these locations on that date.
The relief applies to any Sec. 401(a), 403(a), or 403(b) plan that could make hardship distributions. It also applies to any Sec. 457(b) plan maintained by an eligible employer. The amount of the hardship distribution is limited to the maximum amount that would be permitted to be available for a hardship distribution from the plan under the Code and regulations.
A qualified employer plan that does no provide for the employee must be amended to provide loans or hardship distributions no later than the end of the first plan year beginning after December 31, 2012.
To find out how we can help you make an appointment with us today at 401-254-1051.
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