Additional Hurricane Sandy Tax Relief

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The IRS has recently announced a variety of new measures providing relief to employers and taxpayers affected by Hurricane Sandy. (See our Alert of Nov. 1, 2012.) This additional tax relief includes relaxed rules for retirement plan hardship distributions, favorable treatment for employer-sponsored paid time-off donation programs and deadline extensions for estimated tax payments and certain payroll and excise tax return filings.

Retirement Plan Loans and Hardship Distributions -

For employees affected by Hurricane Sandy who want to use retirement assets in 401(k), 403(b), or governmental 457(b) plans to relieve hardships caused by the storm, the IRS is relaxing certain rules that apply to retirement plan loans and hardship distributions. Under this relief, any hardship resulting from Hurricane Sandy – not just the types of hardship enumerated in the regulations – will be treated as justifying a hardship distribution. In addition, the six-month ban on contributions in many 401(k) and 403(b) plans for employees who take hardship distributions will not apply. Certain procedural requirements for plan loans have also been relaxed.

Please see full alert below for more information.

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Published In: Finance & Banking Updates, Labor & Employment Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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