The recent fires in Los Angeles have had a devastating impact on our community. During this difficult time, we want to share some potential tax and 401(k) provisions that may be helpful to those affected.
Federally Declared Disaster Recovery Withdrawals: Individuals in federally declared disaster areas may be eligible to withdraw up to $22,000 from their retirement accounts without incurring the 10% early withdrawal penalty. This applies to various economic losses due to the disaster.
- Here’s a link to see if an area is a Federally Declared Disaster zone.
- More Information
Emergency Expense Distributions (SECURE 2.0): New provisions allow for a one-time distribution of up to $1,000 per calendar year for emergency personal or family expenses without the 10% penalty. Individuals can self-certify eligibility. This is a rather new provision due to SECURE 2.0, plans may or may not offer this.
Hardship Withdrawals: If other options are exhausted, hardship withdrawals may be considered for federally declared disasters.
IRS Tax Relief: The IRS has extended tax deadlines and provided relief for wildfire victims.
If you or someone you know are facing financial challenges due to the fires, please don't hesitate to reach out. We are here to support you during this difficult time.