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Rep. White, James

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Deadline to Withdraw 401(k) Funds to Assist in Harvey Recovery Approaching  print page

by: Rep. White, James
12/03/2018

(Austin, TX) – The Internal Revenue Service (IRS) announced that 401(k) plans and similar employer-sponsored retirement plans are able to make hardship distributions to victims of Hurricane Harvey.

This broad-based relief means that a retirement plan can allow a victim of Hurricane Harvey to take a hardship distribution or borrow up to the specified statutory limits from the victim’s retirement plan. It also means that a person who lives outside the disaster area can take out a retirement plan loan or hardship distribution and use it to assist a son, daughter, parent, grandparent or other dependent who lived or worked in the disaster area. Note that these withdrawals must be made by December 31, 2018.

The IRS is also relaxing procedural and administrative rules that normally apply to retirement plan loans and hardship distributions. As a result, eligible retirement plan participants will be able to access their money more quickly with a minimum of red tape. In addition, the six-month ban on 401(k) and 403(b) contributions that normally affects employees who take hardship distributions will not apply.

"If you are still in need of funding to help rebuild your home or for any other Harvey related recovery efforts, the IRS has made removed barriers so that you can access your savings for those purposes. I ask that Southeast Texans consider all options that are available to them and take action before the deadline," stated State Representative James White.

For more information please visit https://www.irs.gov/pub/irs-drop/a-17-11.pdf.

Please do not hesitate to contact Saul Mendoza, Chief of Staff, with questions regarding this

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