IRS Issues Reminder About Retirement Effects of Hurricane Relief Legislation

The IRS released a reminder notice on December 13, 2017, of the tax-related relief granted by the Disaster Tax Relief and Airport and Airway Extension Act of 2017. This legislation, enacted in early October, provides special options for those affected by Hurricanes Harvey, Irma, and Maria, including options specific to IRA and employer-sponsored retirement plan assets.

The reminder notes that the relief goes beyond the simple extension of tax-related deadlines, extensions commonly granted in many post-disaster situations by the IRS and Department of Labor (DOL). 

The IRA and retirement plan-related tax provisions are as follows.

  • Waives the 10 percent early distribution penalty tax on distributions
  • Allows recipients to include qualified hurricane distributions in their income over a three-year period
  • Allows retirement plan participants to repay distributions to the plan or an IRA
  • Expands availability of plan loans
  • Extends the normal loan repayment period under the plan
  • Extends the period for plans to make amendments

Also see the Ascensus Washington Pulse: Hurricane Legislation Grants Retirement Plan Relief for more information.

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