IRS Publishes New Guidelines on 401(k) Hardship Documentation

The Internal Revenue Service (IRS) has published substantiation guidelines for documenting safe-harbor hardship distributions from a 401(k).

This memorandum sets forth substantiation guidelines for Employee Plans examining whether a section 401(k) plan hardship distribution is "deemed to be on account of an immediate and heavy financial need" under safe-harbor standards. This memorandum does not address substantiation of non safe-harbor distributions.