WhatsESUP Posted November 28, 2017 Share Posted November 28, 2017 A participant is requesting a hardship distribution for funeral costs for a sister. The sister did not live with the participant and was not claimed as a dependent on the participant's tax return. What does the plan sponsor have to do to verify if the participant's sister is a dependent? Thanks! Link to comment Share on other sites More sharing options...
ETA Consulting LLC Posted November 28, 2017 Share Posted November 28, 2017 Internal Revenue Code Section 152. Good Luck! CPC, QPA, QKA, TGPC, ERPA Link to comment Share on other sites More sharing options...
david rigby Posted November 28, 2017 Share Posted November 28, 2017 https://www.law.cornell.edu/uscode/text/26/152 I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
card Posted November 30, 2017 Share Posted November 30, 2017 Generally, if a 401(k) plan is using the safe harbor hardship rules, it can now allow employees to self-certify that a hardship distribution meets the "immediate and heavy need" requirement. See https://www.irs.gov/pub/foia/ig/spder/tege-04-0217-0008.pdf However, it's not clear if self-certification remains available where, as here, the employer already seems to have done some investigation and may have actual knowledge that the deceased may not be a dependent. Link to comment Share on other sites More sharing options...
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