What is the difference between a hardship distribution and a qualified hurricane distribution?
A qualified hurricane distribution is different from a regular hardship distribution. In order to get a hardship distribution, an employee must demonstrate immediate and heavy financial need and, in some cases, must have exhausted other resources. In contrast, a qualified hurricane distribution may be any distribution from the plan made after August 24, 2005 for Hurricane Katrina, September 22, 2005 for Hurricane Rita, and October 22, 2005 for Hurricane Wilma to an individual whose main home on August 28 (Katrina), September 23 (Rita) and October 23 (Wilma) was located in the hurricane disaster area and who sustained an economic loss by reason of the hurricane. In all cases, the qualified hurricane distribution must be made before January 1, 2007. The amount of a qualified hurricane distribution does not need to correspond to the amount of economic loss suffered by the employee. However, no more than $100,000 in total distributions can be treated as qualified hurricane distributions. A
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