Is there an exception for the penalty for premature distribution for a hardship case? Is that only for a 401K?
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It's in the book! yay!
See TTB 13-3 for exceptions and codes. It will spell it out clearly for you!
~possi"I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey -
Hardship
I had occasion today to look into the same issue and studied more extensively the word "hardship" from the IRS site. I'm still looking.....
This is from the IRS website:
EP Examination Process Guide - Section 9 - Participant Rights - Participant Events - If a Participant Requests a Hardship Withdrawal
If a participant requests a hardship withdrawal, there are some documents that are required to satisfy the hardship withdrawal requirements.
Description: To receive a hardship withdrawal from an IRC section 401(k) or 403(b)plan, the withdrawal must meet certain criteria. The plan should require proof that the criteria have been met.
What It Should Contain: Hardship withdrawals are only permitted if there is an immediate and heavy financial need and other resources are not reasonably available to meet the need. The participant should be notified of what documentation is required to demonstrate a hardship. Please refer to Treasury Reg. Section 1.401(k)-1(d)(2) for more information.
Timing: A participant should receive a description of the documentation required for a hardship withdraw upon request.
Who Is Responsible For Sending It: The administrator of the plan.
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