The Bipartisan Budget Act of 2018 and the Tax Cuts and Jobs Act of 2017 liberalized the hardship distribution rules applicable to 401(k) and 403(b) plans. On September 23, 2019, the IRS issued final regulations — which we discussed in a previous blog — implementing the new hardship distribution rules. While some of the new
Hardships
The Final Regulations For 401(k)/403(b) Hardship Distributions
By Rose Marie Plato on
Posted in Amendments, Basic Plan Document, Bipartisan Budget Act, defined contribution, Distributions, DOL, EBSA, ERISA, Hardships, IRS, QMAC, QNEC, Retirement plans, Uncategorized
On September 23, 2019, the Treasury Department and IRS published final regulations for hardship distributions from both 401(k) and 403(b) plans (the “Final Regulations”). Essentially the hardship distributions changes relax the hardship distribution requirements (i.e., making it easier for participants to obtain hardship distributions) and eliminate many burdens following a hardship distribution (i.e., allowing participants…
IRS Proposed Regulations Implementing Changes To Hardship Distribution Rules
By Joshua Rafsky on
Earlier this year we reported on legislative changes that modified the requirements related to hardship distributions from 401(k) plans. Recently, the IRS issued proposed regulations that if finalized will implement those changes.
Background
The Internal Revenue Code (the “Code”) and associated regulations generally place restrictions on participants’ ability to withdraw their elective deferrals from 401(k)…