Hardship Withdrawal

[Nassau]

To utilize a Hardship for Funeral Expenses of a deceased parent, is that parent required to be a biological parent, or is the option also available for a "step" parent?

[ETA Consulting LLC]

To utilize a Hardship for Funeral Expenses of a deceased parent, is that parent required to be a biological parent, or is the option also available for a "step" parent?

Nothing is stated in the regulations regarding 'step parents'. I would argue that had the step parent previously adopted the participant, then they would be 'deemed' a parent. I just think there are rules that clearly differentiate step parents from biologial parents (and adoption is where the step parent would actually be treated as the biological parent for purposes of the rule being addressed).

Good Luck!

[Guest Pennysaver]

To utilize a Hardship for Funeral Expenses of a deceased parent, is that parent required to be a biological parent, or is the option also available for a "step" parent?

There's no guidance that I am aware of under Treas. Reg. §1.401(k)-1(d)(3) regarding hardship withdrawals for funeral expenses for stepparents. However, the Internal Revenue Manual (3.11.3.13.2.1.2) with respect to determining an exemption's relationship indicates that "stepparent", "stepfather", and "stepmother" are in a parent relationship with the taxpayer. This is consistent with IRC 152(d)(2).

Not really definitive as to IRC 401(k), I know....