Maximum Hardship Amounts

[MBCarey]

Can someone tell me if the max. hardship amount is mandated by the actual amount needed to satisfy the Hardship? I though this was true, but being Friday, I am second quessing myself. A participant needs 2525 to bring her house loan current but she wants to take 13,000. Is this possible?

[QDROphile]

Treas. Reg section 1.401(k)-1(d)(3).

[pmacduff]

you can "gross up" by taxes, fees, etc., but I don't think that's going to get her from $2525 to $13000!!!

[masteff]

I don't have cite to give but some plans do allow for up to two month forward (so all past due plus two). You can easily justify plus one on the rationale that if the person had sufficient money currently for one month's mortgage payment, they would have already applied that to the past due amount, therefore their current immediate financial need includes the upcoming payment. Just be sure to get a copy of a monthly mortgage coupon/statement showing the normal payment as the past due may be for more than just one month and may include penalties and interest. The plans I previously administered allowed "plus two" and passed full IRS audit.