A number of 401(k) plan sponsors have asked whether hardship
withdrawals can be given for COVID-19 related expenses. Under
recent regulations, plans may allow hardship distributions expenses
incurred due to a federally declared
major disaster. The federal state of emergency declared by the
President does not qualify for this purpose. However, if a
participant lives or works in a state that FEMA has declared a
major disaster, a hardship withdrawal may be possible. The list of
states that FEMA has declared a major disaster is constantly
changing. The following states are currently included:
California, Iowa, Louisiana, Washington, New York,
Texas, Florida, North Carolina, and New Jersey. If
you want to allow hardship distributions for people in these states
for COVID-19 reasons:
