IRS Relaxes Loan and Hardship Rules for Hurricane Maria, Wildfire Victims

To qualify for this relief, hardship withdrawals must be made by March 15, 2018.

The Internal Revenue Service (IRS) has relaxed loan and hardship distribution rules for victims of Hurricane Maria and the wildfires in California.

This is similar to the relief provided earlier to Hurricanes Harvey and Irma victims.

Retirement plans can provide loans and hardship withdrawals to employees and certain members of their families who live or work in the disaster areas affected and designated for individual assistance by the Federal Emergency Management Agency (FEMA). For a complete list of eligible localities, visit To qualify for this relief, hardship withdrawals must be made by March 15, 2018.

To make a loan or hardship distribution pursuant to the relief provided by the IRS, a qualified employer plan that does not provide for them must be amended to provide for loans or hardship distributions no later than the end of the first plan year beginning after December 31, 2017.

The IRS is also relaxing procedural and administrative rules that normally apply to retirement plan loans and hardship distributions. As a result, eligible retirement plan participants will be able to access their money more quickly with a minimum of red tape. However, the IRS announcement says plan sponsors must make a good-faith effort to acquire any foregone usually required documentation as soon as practicable.

In addition, the six-month ban on 401(k) and 403(b) contributions that normally affects employees who take hardship distributions will not apply.

IRS Announcement 2017-15 is here.