The Internal Revenue Service is allowing 401(k) and similar employer-sponsored retirement plans to make loans and hardship distributions to victims of Hurricane Sandy and members of their families, as part of the federal government’s efforts to support state and local partners affected by the storm.
401(k) plan participants, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, and state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules, the IRS states. While IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures.
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