Client Alert: New Alternative Substantiation Guidelines for Hardship Withdrawals

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May 08, 2017

Most 401(k) and 403(b) plans allow plan participants to take in-service hardship withdrawals.  Administrators of these plans (or their recordkeepers) must obtain and preserve records substantiating a participant’s request for a hardship withdrawal.  The IRS recently described new alternative substantiation guidelines for its Employee Plans Examination employees to follow when they audit hardship withdrawals from a 401(k) plan or 403(b) plan.