Harvey victims may find relief in retirement loans, distributions
Q&A with Brandon Long
Brandon P. Long
As a way to assist taxpayers in the Texas counties adversely affected by Hurricane Harvey, the Internal Revenue Service recently announced that employer-sponsored 401(k) plans and certain similar retirement plans would be allowed to make loans and hardship distributions to qualifying plan participants to pay for expenses specifically resulting from the devastating hurricane. In a Q&A with The Oklahoman, employee benefits attorney Brandon Long explained that this relief is noteworthy in that IRS regulations generally restrict loans and hardship distributions to a limited number of “safe harbor” events, such as paying for certain necessary medical expenses.
“Some Oklahoma employers may have employees in Texas in the counties impacted by Hurricane Harvey,” said Long. “But even if an Oklahoma employer doesn't, many Oklahoma employers have employees with spouses, sons, daughters, parents, grandparents and/or other relatives who are in those counties. The relief potentially applies to those employees as well.”
Special rules and requirements apply to this form of relief, so employers who wish to take advantage of this relief should first consult with their qualified employee benefits counsel and plan administrator before making any loans or hardship distributions, said Long. In some cases, an amendment to the employer’s plan may also be required.
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