IRS Announces Relief to Facilitate Retirement Plan Loans & Hardship Distributions to Hurricane Harvey Victims
Following FEMA’s major disaster declaration for Texas and Hurricane Harvey, the IRS has announced relief from certain verification procedures governing loans and hardship distributions from qualified retirement plans for victims in covered Texas counties. (IRS Announcement 2017-11). The purpose of the IRS Announcement is to relax certain procedures in order to allow employees to access their retirement plan funds, as needed, on account of financial needs created by Hurricane Harvey. The relief does not, however, provide relief from taxation. The IRS Announcement reminds taxpayers that in general the normal spousal consent rules apply, and, expect to the extent the distribution consist of already-taxed amounts, any distribution made pursuant to the relief will be included in gross income and generally subject to the 10-percent additional tax under §72(t).
For more information, please click here on Hurricane Harvey Retirement Plan Relief.
Source: Thomson Reuters/Tax & Accounting