Hardship Withdrawal from Roth 401(k) Contributions

[Nassau]

I received the following question from one of my clients.....

A participant has applied for a hardship withdrawal. She wishes to take it from her Roth account (403(b) Plan). Based on the IRS Q&A that I viewed on line, the withdrawal will be prorated between Roth contribution basis and earnings. That was not what I was expecting, given that the maximum withdrawal is limited to the participant’s career-to-date contribution total.

Please let me know if you see anything different about the basis/earning proration."

Can anyone comment on this question or provide a response?

[Tom Poje]

that is my understanding, and , for example, if the participant requested $1000, and it was split $900 actual deferral and $100 gains the person is still deemed to have taken $1000 in 'deferal', just in case they want another hardship in the future.

see also Treas. Reg. §1.402A-1, Q&A 8 (though it ties into Q and 7)

one place to find the Treas Reg is at:

http://edocket.access.gpo.gov/cfr_2010/apr...cfr1.402A-1.pdf