Explore hardship distribution rules, tax consequences, safe harbor guidelines, and strategies to avoid penalties.
Navigating the complex regulations surrounding hardship distributions from retirement plans can lead to potential tax penalties and increased regulatory scrutiny. This webinar will provide essential insights into managing hardship distributions effectively. Participants will learn to identify situations and plans for which hardship or similar distributions may be made. They will also understand the tax consequences and strategies to avoid penalty taxes in specific situations.
Learning Objectives
- You will be able to define hardship distributions.
- You will be able to describe circumstances in which hardship distributions may be made.
- You will be able to discuss tax consequences in hardship distributions.
- You will be able to strategies to avoid penalty taxes.
Agenda
Background
- Plans Covered
- Definition of Hardship
- Historical Limits on Hardship Distributions
- Changes Made by the Balanced Budget Act of 2018 (BBA)
Availability of Financial Hardship
- Financial Hardship of a Participant
- Distribution on Account of Financial Hardship
- Other Distributions Are Available
Tax Consequences of Hardship Distribution
- Distribution on Account of Hardship Cannot Be Rolled Over
- Distribution Is Taxable in Year Distributed
- Distribution Is Subject to 10% Penalty Tax
- Reporting of Distributions
Safe Harbor Hardship Distributions
- Expenses for Medical Care
- Purchase of a Principal Residence
- Payment of Tuition, Education Expenses, Room and Board for Post-Secondary Education of Employee, Spouse or Dependent
- Payments to Prevent the Eviction of the Employee From Principal Residence
- Burial or Funeral Expenses of Certain Family Members or Primary Beneficiary Under the Plan
- Repair of Damage to Employee’s Principal Residence
- Losses Incurred as a Result of a Disaster Declared by FEMA
Requirements for Substantiating Hardship Distributions
Correcting Errors
Speakers
Robert C. Schmidt,
Kean Miller LLP- Of counsel in the Baton Rouge office of Kean Miller LLP
- Specializes in employee benefits, pension and welfare benefit plans, executive compensation and related tax issues
- Over 40 years of experience practicing law in the employee benefits area
- Has extensive experience in plan design, creation, merging and splitting plans, termination of plans, and correcting plan errors
- Maintains a preapproved defined contribution plan document for use by employers seeking to establish plans, including plans with 401(k) features
- Served as an attorney-adviser with the U.S. Tax Court in Washington, D.C.
- Listed in every edition of Best Lawyers® – Employee Benefits Law, since 1984 was listed as Lawyer of the Year in 2025
- Board Certified as a Tax Law Specialist by the Louisiana Board of Legal Specialization
- LL.M. Degree, Georgetown University Law Center; J.D. Degree, University of Virginia; B.S. Degree, Yale University
Who Should Attend
This live webinar is designed for CPAs, accountants, attorneys, presidents, vice presidents, business owners and managers, CFOs, tax managers, tax preparers, financial planners, and enrolled agents.
