SUMMARY
The IRS recently issued proposed amendments to regulations
concerning 401(k) plan hardship distributions. The proposed
regulations address changes to hardship distribution rules from the
Bipartisan Budget Act of 2018 and other legislation.
Though the regulations are only proposed, 401(k) plan sponsors
should promptly consider these changes because decisions should be
made on applying certain optional changes, which generally can be
effective for plan years beginning after December 31, 2018.
IN DEPTH
The Internal Revenue Service (IRS) has issued proposed
amendments to the regulations governing hardship distributions
under 401(k) plans. The proposed regulations mainly address changes
made to the hardship distribution rules by the Bipartisan Budget
Act of 2018 (Budget Act). The proposed regulations also address
hardship distribution topics arising from other legislation.
