Changes in Hardship Withdrawal Rules for 401(k) and 403(b) Plans – What Plan Sponsors Need to Know
Employers who sponsor a 401(k) plan or a 403(b) plan that offers hardship withdrawals have some decisions to make.
The Bipartisan Budget Act of 2018 signed into law in February 2018 revised the hardship rules for 401(k) and 403(b) plans. There were many questions about how the rules would apply, and the IRS has now answered those questions in proposed regulations issued November 14, 2018. While the regulations are proposed, they probably won’t change significantly when issued in final form, and because the rules are effective January 1, 2019, for the calendar year plans, employers and plan administrators should consider their options and check with their service providers about implementing changes in plan operations now.
To access this article in its entirety, click here for a summary regarding the changes resulting from these new rules.
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Mark F. Sommer is FBT’s Tax, Benefits and Estates Practice Group leader, focusing on state, local and federal tax, incentives, tax controversy and litigation. He has successfully handled thousands of audits, protests, appeals, and transactional matters.