Hardship withdrawals-did withholding rules change recently???

[Guest DeePA]

Either I'm loosing my mind or just getting old (and my hearing is going)!

I was recetnly at a seminar and I am almost certain that the speaker noted that for hardship withdrawals from any source (401k deferrals, match , profit sharing) they are no longer allowed to be rolled over?

did this change? My understanding was that only deferrals were prohibited from being rolled over?

Thanks!

[jaemmons]

Only amounts distributed on account of hardship, which are attributable to elective deferrals and any pre-89 earnings thereon, are not eligible for roll over after December 31, 1999. Therefore, it seems that any additional amounts (e.g. - match, profit sharing, and earnings thereon) are eligible rollover amounts and as such are subject to automatic 20% withholding.

This is a reference from IRS Notice 99-5

V. HARDSHIP DESCRIBED IN SECTION 401(k)(2)(B)(i)(IV)

For distributions after December 31, 1999, the following rules apply to hardship distributions described in section 401(k)(2)(B)(i)(IV):

A. The portion of a distribution from a qualified plan that is ineligible for rollover treatment because it is "a hardship distribution described in section 401(k)(2)(B)(i)(IV)" is the amount described in section 1.401(k)-1(d)(2)(ii)...

[Guest DeePA]

I found it..none allowed to be r/o.

Egtrra sec 636

thanks!

[jaemmons]

Well, it looks like I forgot that EGTRRA change. Mental note has been made. thanks