![]() ![]() The new rules, which were first proposed in 2018, affect several technical aspects of administering a hardship withdrawal. These events include, among other things, medical expenses, costs related to purchasing a home, possible eviction or foreclosure, funeral expenses, certain tuition expenses, and expenses related to damage to an employee's home (a "casualty loss"). Historically, the hardship withdrawal regulations have included several "safe harbor" life events that were "deemed" to create an immediate and heavy financial need. BackgroundĪs a matter of plan design, 401(k) and 403(b) plans may allow a participant to request an in-service withdrawal if the participant has an "immediate and heavy financial need" and the withdrawal is necessary to meet that need. Nongovernmental 403(b) plans are subject to similar rules under Revenue Procedure 2019-39, which the IRS issued on Sept. 12, 2019, establishes the deadline for amending 401(k) plans to comply with the new hardship rules. Revenue Procedure 2020-9, which the IRS issued on Dec. Many of the changes are already effective, but certain mandatory provisions take effect Jan. Two years in the making, the IRS issued final regulations on Sept. The Tax Cuts and Jobs Act of 2017 made several changes to the hardship withdrawal rules for 401(k) and 403(b) retirement plans. ![]()
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