New Emergency 401(k) Distribution Rules
- A new coronavirus distribution option allows participants to withdraw up to $100,000 from their 401k plan.
- The distribution is NOT subject to the early withdrawal of 10%. Employees will pay normal income tax on the distribution but can balance the income taxes over three years.
- Plan participants have 3 years to roll the distribution back into the plan without regard for that year’s cap on contributions.
- The distribution will automatically be subject to 10% federal taxes withheld unless the participant requests that this withholding be waived.
- Required minimum distribution requirements are waived for 2020.
- To request an emergency distribution, login into your account at www.myplanconnection.com or call 1-800-878-5220.