Feb 28, 2017

IRS Publishes New Guidelines on 401(k) Hardship Distributions

401k savings jar

The IRS has published substantiation guidelines for documenting safe-harbor hardship distributions from a 401(k).  It provides what an IRS examiner would request on an audit to substantiate that a 401(k) plan hardship distribution is “deemed to be on account of an immediate and heavy financial need” under safe-harbor standards. Note that the guidance does not address non safe-harbor distribution substantiation.

Click here for the IRS Guidance.