What is a Hardship Distribution and how can I get one?
A 401(k) plan may provide that elective contributions may be distributed on account of Hardship, which is an immediate and heavy financial need. The IRS has provided four “Safe-Harbor” definitions of hardship: 1.Medical expenses that have been incurred by the employee, his or her spouse, or any of his or her dependents to obtain medical care, to the extent not reimbursed by insurance. A distribution necessary to pay for procedures that have not yet occurred is permitted 2.Costs directly related to the purchase of the employee’s principal residence (excluding mortgage payments). 3.Payments of tuition, related educational fees, and room and board expenses for the next 12 months of postsecondary education for the employee or his or her spouse, children or dependents. 4.Payments necessary to prevent the eviction of the employee from his or her principal residence or foreclosure on the mortgage of that residence. 5. Payments for burial or funeral expenses for the employee’s deceased parent,
