Are you offering disaster relief options in your retirement plan?

Your company’s 401(k) may, but is not required to, permit participants to take a qualified disaster recovery distribution. Such distribution is (1) limited to $22,000, (2) taxable over 3 years (or in the distribution year if preferred), (3) not subject to the 10% penalty for those under age 59½, and (4) can be recontributed to the plan within 3 years (with taxes recouped by filing an amended return). If you want your plan to allow such distributions, be sure to understand tax terms, including “qualified individual,” “incident period,” “economic loss,” and more. You can learn more in an IRS Fact Sheet. #IdeaoftheDay