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IRS.gov Website
Publication 976
taxmap/pubs/p976-004.htm#en_us_publink100075864

IRAs and Other Retirement Plans(p11)

rule
New rules provide for tax-favored withdrawals and repayments from certain retirement plans for taxpayers who suffered economic losses as a result of disasters declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act during calendar year 2016. See Qualified 2016 Disasters for a list of 2016 disasters declared by the President.
New rules also provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of Hurricane Harvey or Tropical Storm Harvey, Hurricane Irma, Hurricane Maria, or the California wildfires.
The principles set forth in Notice 2005-92, 2005-51 I.R.B. 165, available at IRS.gov/irb/2005-51_IRB#NOT-2005-92, which provides guidance on the tax-favored treatment of distributions and plan loans for victims of Hurricane Katrina, also generally apply to these new rules.
Certain information for eligible retirement plans is provided at the end of this section.
taxmap/pubs/p976-004.htm#en_us_publink100075865

Definitions(p11)

rule
taxmap/pubs/p976-004.htm#en_us_publink100075866

Qualified 2016 disaster distribution.(p11)

rule
A qualified 2016 disaster distribution is any distribution you received from an eligible retirement plan made on or after January 1, 2016, and before January 1, 2018, if at any time during the calendar year 2016 your main home was located in a major disaster area declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act and you sustained an economic loss by reason of the events giving rise to such Presidential declaration. If the previous sentence applies to you, you can generally designate any distribution (including a periodic payment or a required minimum distribution) from an eligible retirement plan as a qualified 2016 disaster distribution, regardless of whether the distribution was made on account of a federally declared disaster in calendar year 2016. Qualified 2016 disaster distributions are permitted without regard to your need or the actual amount of your economic loss, described later.
The total of your qualified 2016 disaster distributions from all plans is limited to $100,000. If you have distributions from more than one type of plan, such as a 401(k) plan and an IRA, and the total exceeds $100,000, you may allocate the $100,000 limit among the plans by any reasonable method.
taxmap/pubs/p976-004.htm#en_us_publink100076008

Qualified 2017 disaster distribution.(p11)

rule
A qualified 2017 disaster distribution is any distribution you received from an eligible retirement plan if all of the following apply.
  1. The distribution was made:
    1. After August 22, 2017, and before January 1, 2019, for Hurricane Harvey or Tropical Storm Harvey;
    2. After September 3, 2017, and before January 1, 2019, for Hurricane Irma;
    3. After September 15, 2017, and before January 1, 2019, for Hurricane Maria; or
    4. After October 7, 2017, and before January 1, 2019, for California wildfires.
  2. Your main home was located in a disaster area listed below on the date or any date in the period shown for that area.
    1. August 23, 2017, for the Hurricane Harvey disaster area.
    2. September 4, 2017, for the Hurricane Irma disaster area.
    3. September 16, 2017, for the Hurricane Maria disaster area.
    4. October 8, 2017, to December 31, 2017, for the California wildfire disaster area.
  3. You sustained an economic loss because of Hurricane Harvey or Tropical Storm Harvey, Hurricane Irma, Hurricane Maria, or the California wildfires.
If 1 through 3 above apply, you can generally designate any distribution (including a periodic payment or a required minimum distribution) from an eligible retirement plan as a qualified 2017 disaster distribution, regardless of whether the distribution was made on account of Hurricane Harvey or Tropical Storm Harvey, Hurricane Irma, Hurricane Maria, or the California wildfires. Qualified 2017 disaster distributions are permitted without regard to your need or the actual amount of your economic loss, described later.
The total of your qualified 2017 disaster distributions from all plans is limited to $100,000 for Hurricane Harvey, Tropical Storm Harvey, Hurricane Irma, or Hurricane Maria, and $100,000 for the California wildfires. If you have distributions from more than one type of plan, such as a 401(k) plan and an IRA, and the total exceeds $100,000 for either category, you may allocate the $100,000 limit among the plans by any reasonable method.
A reduction or offset (after August 22, 2017, for Hurricane Harvey or Tropical Storm Harvey; after September 3, 2017, for Hurricane Irma; after September 15, 2017, for Hurricane Maria; or after October 7, 2017, for California wildfires) of your account balance in an eligible retirement plan in order to repay a plan loan can also be designated as a qualified disaster distribution.
taxmap/pubs/p976-004.htm#en_us_publink100078153

Economic loss.(p12)

rule
Qualified disaster distributions are permitted without regard to your need or the actual amount of your economic loss. Examples of an economic loss include, but are not limited to:
  1. Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause;
  2. Loss related to displacement from your home; or
  3. Loss of livelihood due to temporary or permanent layoffs.
taxmap/pubs/p976-004.htm#en_us_publink100075867

Eligible retirement plan.(p12)

rule
An eligible retirement plan can be any of the following.
taxmap/pubs/p976-004.htm#en_us_publink100075868

Main home.(p12)

rule
Generally, your main home is the home where you live most of the time. A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home.
taxmap/pubs/p976-004.htm#en_us_publink100075869

Taxation of Qualified 2016 Disaster Distributions and Qualified 2017 Disaster Distributions(p12)

rule
Qualified 2016 disaster distributions and qualified 2017 disaster distributions are included in income in equal amounts over three years. However, if you elect, you can include the entire qualified 2016 disaster distribution or the entire qualified 2017 disaster distribution in your income in the year it was received.
Qualified 2016 disaster distributions and qualified 2017 disaster distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). Also, if you are receiving substantially equal periodic payments from a qualified retirement plan, the receipt of a qualified 2016 disaster distribution or a qualified 2017 disaster distribution from that plan will not be treated as a change in those substantially equal payments merely because of the qualified 2016 disaster distribution or the qualified 2017 disaster distribution. However, any distributions you receive in excess of the $100,000 qualified 2016 disaster distribution limit or either of the two $100,000 qualified 2017 disaster distribution limits may be subject to the additional tax on early distributions. See Form 8915A or Form 8915B, as applicable, for more information on reporting qualified 2016 disaster distributions and qualified 2017 disaster distributions.
taxmap/pubs/p976-004.htm#en_us_publink100075870

Repayment of Qualified Disaster Distributions(p12)

rule
If you choose, you generally can repay any portion of a qualified 2016 disaster distribution or a qualified 2017 disaster distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Also, you can repay a qualified 2016 disaster distribution or a qualified 2017 disaster distribution made on account of a hardship from a retirement plan. However, see Exceptions below for qualified 2016 disaster distributions or qualified 2017 disaster distributions you cannot repay.
You have 3 years from the day after the date you received either the qualified 2016 disaster distribution or the qualified 2017 disaster distribution to make a repayment. Amounts that are repaid are treated as a trustee-to-trustee transfer and are not included in income. Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a rollover. See Form 8915A or Form 8915B, as applicable, for more information on how to report repayments.
taxmap/pubs/p976-004.htm#en_us_publink100075871

Exceptions.(p12)

rule
You cannot repay the following types of distributions.
  1. Qualified 2016 disaster distributions or qualified 2017 disaster distributions received as a beneficiary (other than as a surviving spouse).
  2. Required minimum distributions.
  3. Periodic payments (other than from an IRA) that are for:
    1. A period of 10 years or more,
    2. Your life or life expectancy, or
    3. The joint lives or joint life expectancies of you and your beneficiary.
taxmap/pubs/p976-004.htm#en_us_publink100075872

Repayment of Qualified Distributions for the Purchase or Construction of a Main Home(p13)

rule
If you received a qualified distribution to purchase or construct a main home in the Hurricane Harvey, Irma, or Maria disaster area, you can repay all or any part of that distribution to an eligible retirement plan during the period beginning on August 23, 2017, and ending on February 28, 2018.
If you received a qualified distribution to purchase or construct a main home in the California wildfire disaster area, you can repay all or any part of that distribution to an eligible retirement plan during the period beginning on October 8, 2017, and ending on June 30, 2018.
To be a qualified distribution, the distribution must meet all of the following requirements.
  1. The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA.
  2. The distribution was received after February 28, 2017, and before September 21, 2017, for Hurricane Harvey, Tropical Storm Harvey, Hurricane Irma, and Hurricane Maria. For the California wildfires, the distribution was received after March 31, 2017, and before January 15, 2018.
  3. The distribution was to be used to purchase or construct a main home in the Hurricane Harvey, Irma, or Maria disaster area, or in the California wildfire disaster area that was not purchased or constructed because of Hurricane Harvey, Tropical Storm Harvey, Hurricane Irma, Hurricane Maria, or the California wildfires.
An amount that is repaid before March 1, 2018 (July 1, 2018, for repayments as a result of the California wildfires), is treated as a trustee-to-trustee transfer and is not included in income. Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a rollover.
A qualified distribution not repaid before March 1, 2018 (July 1, 2018, for repayments as a result of the California wildfires), may be taxable for 2017 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions.
You must file Form 8915B if you received a qualified distribution that you repaid, in whole or in part, before March 1, 2018 (July 1, 2018, for repayments as a result of the California wildfires).
taxmap/pubs/p976-004.htm#en_us_publink100075873

Loans From Qualified Plans(p13)

rule
As described further below, the following benefits are available to qualified individuals.
taxmap/pubs/p976-004.htm#en_us_publink100075874

Qualified individual.(p13)

rule
You are a qualified individual if any of the following apply.
taxmap/pubs/p976-004.htm#en_us_publink100075875

Limits on plan loans.(p13)

rule
The general $50,000 limit on plan loans may be increased to $100,000 by the plan administrator. In addition, the general loan limit based on 50% of your vested accrued benefit may be increased to 100% of that benefit. The higher limits apply only to loans made during the period beginning on September 29, 2017, and ending on December 31, 2018, for Hurricane Harvey or Tropical Storm Harvey, Hurricane Irma, or Hurricane Maria; or the period beginning on February 9, 2018, and ending on December 31, 2018, for the California wildfires.
taxmap/pubs/p976-004.htm#en_us_publink100075876

One-year suspension of plan loan payments.(p13)

rule
Payments on plan loans due during the period beginning on the qualified beginning date and ending on December 31, 2018, may be suspended for 1 year (suspension period) by the plan administrator. The qualified beginning date is: If you are a qualified individual based on more than one disaster, use the suspension period with the earliest beginning date.
taxmap/pubs/p976-004.htm#en_us_publink100076790

Information for Eligible Retirement Plans(p14)

rule
A plan administrator may choose whether to treat a distribution as a qualified 2016 disaster distribution or a qualified 2017 disaster distribution (qualified disaster distribution) or whether to accept a rollover of a qualified disaster distribution and may develop reasonable procedures for determining whether distributions are qualified disaster distributions. However, the treatment of qualified disaster distributions must be consistent under each plan. The payment of a qualified disaster distribution to an individual must be reported on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. This reporting is required even if the individual recontributes the qualified disaster distribution to the same plan in the same year. If a payer is treating the payment as a qualified disaster distribution and no other appropriate code applies, the payer is permitted to use distribution code 2 (early distribution, exception applies) in box 7 of Form 1099-R. However, a payer in this case is also permitted to use distribution code 1 (early distribution, no known exception) in box 7 of Form 1099-R.