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Amendments relating to hardship distributions from section 401(k) plans

Hardship distributions from section 401(k) plans

The U.S. Treasury Department and IRS today released for publication in the Federal Register proposed regulations containing amendments to the regulations relating to hardship distributions from section 401(k) plans.


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The proposed regulations [PDF 213 KB] reflect statutory changes affecting section 401(k) plans, including recent changes made by the Bipartisan Budget Act of 2018. These regulations would affect participants in, beneficiaries of, employers maintaining, and administrators of plans that contain cash or deferred arrangements or provide for employee or matching contributions.

The proposed regulations update the section 401(k) and (m) regulations to reflect: 

  • The enactment of:
    • Sections 41113 and 41114 of the Bipartisan Budget Act of 2018
    • Sections 826 and 827 of the Pension Protection Act of 2006
    • Section 105(b)(1)(A) of the Heroes Earnings Assistance and Relief Tax Act of 2008
  • The application of the hardship distribution rules in light of the modification to the casualty loss deduction rules made by section 11044 of the new U.S. tax law (Pub. L. No. 115-97, often referred to as the “Tax Cuts and Jobs Act”)

The purpose of this report is to provide text of the proposed regulations.

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