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What are the consequences of taking a hardship distribution?

April 26, 2017consequences distribution hardship taking

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What are the consequences of taking a hardship distribution?

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Hardship distributions are includible in gross income except for designated Roth contributions. They may be subject to an additional tax on early distributions. Unlike loans, hardship distributions are not repaid to the plan and permanently reduce your account balance under the plan. If you receive a hardship distribution, you will be unable to contribute to the 403(b) plan for 6 months. A hardship distribution cannot be rolled over into an IRA or another qualified plan.