In 2004 3 hurricanes crossed destructively thru many counties in florida. And i have heard as part of hurricane relief citizens of those counties are exempt from paying the 10% penalty on b4 59 1/2 withdrawals of retirement funds such as 401k and ira. Any truth to this?? Is St johns one of those counties???
2007-02-21 03:45:39 · 5 answers · asked by eddie a 2 in Business & Finance ➔ Taxes ➔ United States
To qualify, the distribution must be made on or after Aug. 25, 2005, and before Jan.1, 2007, from an eligible retirement plan such as a qualified plan or an IRA, to an eligible individual – one whose principal residence was in the Hurricane Katrina disaster area on Aug. 28, 2005, and who sustained an economic loss from Hurricane Katrina. The total amount of tax favored distributions an individual can receive from all plans, annuities, or IRAs is $100,000.
See publication 4492
http://www.irs.gov/publications/p4492/index.html
More information can be found here
http://www.irs.gov/newsroom/article/0,,id=149669,00.html
2007-02-21 04:58:46 · answer #1 · answered by Anonymous · 1⤊ 1⤋
Hurricane Katrina victims were specifically addressed with that 10% tax break but not the Florida counties. Also, prior to last year 99% of the plans you couldn't even take a hardship distribution for casualty damage done to your house. So that would have likely ex'd you out there.
Personally? Taking a hardship devestates your retirement account. Every 10k you take quite possibly sucks out 120k from your ending retirement account. I would never take a hardship to buy anything or prevent eviction from anything. Medical and Burial expenses are about the only reasons that one should do this...heart and soul reasons. Nothing else is worth it.
2007-02-21 05:16:15 · answer #2 · answered by digdowndeepnseattle 6 · 0⤊ 2⤋
The vested quantity is what's yours. The unvested quantity is employer matching money that you have not earned yet - so that you're not to any extent further getting those. study your 401(ok) plan summary description. once you're laid off, any unpaid mortgage stability immediately away turns into an early distribution subject to the ten% penalty and earnings tax. With some thing of the $6500, you could withdraw it (and also incur the penalty + tax) or roll it over into an IRA.
2016-12-04 11:19:49 · answer #3 · answered by brenneman 4 · 0⤊ 0⤋
There are a variety special treatments for hurricane victims of Katrina, and not just in Florida. For more info regarding 401K withdrawals and hurricane victims, see http://www.irs.gov/newsroom/article/0,,id=149669,00.html
2007-02-21 10:15:08 · answer #4 · answered by Judy 7 · 0⤊ 1⤋
its not a matter of what county you are in.....the irs will waive early withdrawal penalties due to hardship everywhere provided you can document the damage and what the $ was used for....if it is because displacement i would say definitely......
2007-02-21 03:55:21 · answer #5 · answered by cookiesmom 7 · 0⤊ 0⤋