- Congress permits two types of hardship distributions.
- File a Form 5329 to report the tax on early distributions.
- Your plan administrator will send you a Form 1099-R.
BILL'S ANSWER
I realize you are being somewhat facetious, but Congress wrote the 401(k) rules in such a manner that allows employers to create plans that give employees access to the money saved in 401(k) accounts under certain circumstances. See the IRS document 401(k) Resource Guide - Plan Participants - General Distribution Rules to read the hardship rules.
One of the hardship rules allows penalty-free distributions "To prevent foreclosure or eviction from your home." If you can create an argument to your 401(k) plan administrator that unless you receive a distribution from your 401(k) that you will be evicted from your home, then you can receive a distribution. You must argue that, “(the) financial need may be immediate and heavy even if it was reasonably foreseeable or voluntarily incurred by the employee.”
I hope this information helps you Find. Learn & Save.
Best,
Bill
B/o Haddon Hts, NJ | November 07, 2011
November 07, 2011
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