skip navigation

Search Help
Navigation Help


Main Topics
A B C D E F G H I
J K L M N O P Q R
S T U V W X Y Z #


FAQs
Forms
Publications
Tax Topics


Comments
About Tax Map

previous page Previous Page: Publication 575 - Pension and Annuity Income - Relief for Kansas Disaster Area
next page Next Page: Publication 575 - Pension and Annuity Income - How To Get Tax Help
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p575-009.htm#en_us_publink1000115331

Relief for Midwestern Disaster Areas(p37)


rule
spacer

Relief for Midwestern Disaster Areas

See Tables 1 and 2 in Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Area, for a list of the Midwestern disaster areas and the applicable disaster dates.
New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of the Midwestern severe storms, tornadoes, or flooding.
If you receive a qualified disaster recovery assistance distribution, it is taxable but is not subject to the 10% additional tax on early distributions (see the sections on Cost, Taxation of Periodic Payments, and Taxation of Nonperiodic Payments, earlier). However, the distribution is included in income ratably over 3 years unless you elect to report the entire amount in the year of distribution. You can repay the distribution and not be taxed on the distribution. See Qualified disaster recovery assistance distribution, later.
If you received a distribution from an eligible retirement plan to purchase or construct a main home but did not purchase or construct the home because of the severe storms, tornadoes, or flooding, you may be able to repay the distribution and not pay income tax or the 10% additional tax on early distributions on that distribution. See Repayment of a Qualified Distribution for the Purchase or Construction of a Main Home.
Form 8930, Qualified Disaster Recovery Assistance Retirement Plan Distributions and Repayments, is used to report qualified disaster recovery assistance distributions and repayments. Also report qualified distributions for home purchases and construction that were cancelled because of the severe storms, tornadoes, or flooding on Form 8930.
For information on other tax provisions related to these storms, tornadoes, or flooding, see Publication 4492-B.
taxmap/pubs/p575-009.htm#en_us_publink1000115332

Qualified Disaster Recovery Assistance Distribution(p38)


rule
spacer

previous topic occurrence Qualified Disaster Recovery Assistance Distribution next topic occurrence

A qualified disaster recovery assistance distribution is any distribution you received from an eligible retirement plan (see Eligible retirement plan on page 35) if all of the following apply.
  1. The distribution was made on or after the applicable disaster date and before January 1, 2010.
  2. Your main home was located in a Midwestern disaster area on the applicable disaster date. For a definition of main home, see the Form 8930 instructions.
  3. You sustained an economic loss because of the severe storms, tornadoes, or flooding and your main home was in a Midwestern disaster area on the applicable disaster date. Examples of an economic loss include, but are not limited to:
    1. Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause;
    2. Loss related to displacement from your home; or
    3. Loss of livelihood due to temporary or permanent layoffs.
If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified disaster recovery assistance distribution, regardless of whether the distribution was made on account of the severe storms, tornadoes, or flooding. Qualified disaster recovery assistance distributions are permitted without regard to your need or the actual amount of your economic loss.
A reduction or offset (on or after the applicable disaster date) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified disaster recovery assistance distribution.
taxmap/pubs/p575-009.htm#en_us_publink1000115375

Distribution limit.(p38)


rule
spacer

The total of your qualified disaster recovery assistance distributions from all plans is limited to $100,000. If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose.
taxmap/pubs/p575-009.htm#en_us_publink1000115376

Example.(p38)
spacer

In August 2008, you received a distribution of $50,000. In 2009, you receive a distribution of $125,000. Both distributions meet the requirements for a qualified disaster recovery assistance distribution. If you decide to treat the entire $50,000 received in 2008 as a qualified disaster recovery assistance distribution, only $50,000 of the 2009 distribution could be treated as a qualified disaster recovery assistance distribution.
taxmap/pubs/p575-009.htm#en_us_publink1000115336

Taxation of Qualified Disaster Recovery Assistance Distributions(p38)


rule
spacer

previous topic occurrence Taxation of Qualified Disaster Recovery Assistance Distributions next topic occurrence

Qualified disaster recovery assistance distributions are included in income in equal amounts over three years. However, if you elect, you can include the entire distribution in your income in the year it was received.
Qualified disaster recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). However, any distributions you receive in excess of the $100,000 qualified disaster recovery assistance distribution limit may be subject to the additional tax on early distributions.
For more information, see Form 8930.
taxmap/pubs/p575-009.htm#en_us_publink1000115337

Repayment of Qualified Disaster Recovery Assistance Distributions(p38)


rule
spacer

previous topic occurrence Repayment of Qualified Disaster Recovery Assistance Distributions next topic occurrence

If you choose, you generally can repay any portion of a qualified disaster recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Also, you can repay a qualified disaster recovery assistance distribution made on account of a hardship from a retirement plan. However, see Exceptions below for qualified disaster recovery assistance distributions you cannot repay.
You have three years from the day after the date you received the distribution to make a repayment. Amounts that are repaid are treated as a qualified rollover and are not included in income. Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. See Form 8930 for more information on how to report repayments.
taxmap/pubs/p575-009.htm#en_us_publink1000115377

Repayment of distributions if reporting under the 1-year election.(p39)


rule
spacer

If you elect to include all of your qualified disaster recovery assistance distributions received in a year in income for that year and then repay any portion of the distributions during the allowable 3-year period, the amount repaid will reduce the amount included in income for the year of distribution. If the repayment is made after the due date (including extensions) for your return for the year of distribution, you will need to file a revised Form 8930 with an amended return. See Amending Your Return, later.
taxmap/pubs/p575-009.htm#en_us_publink1000115378

Example.(p39)
spacer

Maria received a $45,000 qualified disaster recovery assistance distribution on September 1, 2008. After receiving reimbursement from her insurance company for a casualty loss, Maria repays $45,00 to an IRA on March 31, 2009. She reports the distribution and the repayment on Form 8930, which she files with her timely filed 2008 tax return. As a result, no portion of the distribution is included in income on her return.
taxmap/pubs/p575-009.htm#en_us_publink1000115379

Repayment of distributions if reporting under the 3-year method.(p39)


rule
spacer

If you are reporting the distribution in income over the 3-year period and you repay any portion of the distribution to an eligible retirement plan before filing your 2008 tax return by the due date (including extensions) for that return, the repayment will reduce the portion of the distribution that is included in income in 2008. If you repay a portion after the due date (including extensions) for filing your 2008 return, the repayment will reduce the portion of your distribution that is includible in income for that year, the excess may be carried forward or (after 2008) back to reduce the amount included in income for that year.
taxmap/pubs/p575-009.htm#en_us_publink1000115380

Example.(p39)
spacer

John received a $90,000 qualified disaster recovery assistance distribution from his pension plan on October 15, 2008. He does not elect to include the entire distribution in his 2008 income. Without any repayments, he would include $30,000 of the distribution in income on each of his 2008, 2009, and 2010 returns. On October 30, 2009, John repays $45,000 to an eligible retirement plan. He makes no other repayments during the 3-year period. John may report the distribution and repayment in either of the following ways.
taxmap/pubs/p575-009.htm#en_us_publink1000115338

Exceptions.(p39)


rule
spacer

You cannot repay the following types of distributions.
  1. Qualified disaster recovery assistance distributions received as a beneficiary (other than a surviving spouse).
  2. Required minimum distributions.
  3. Periodic payments (other than from an IRA) that are for:
    1. A period of 10 years or more,
    2. Your life or life expectancy, or
    3. The joint lives or joint life expectancies of you and your beneficiary.
taxmap/pubs/p575-009.htm#en_us_publink1000115381

Amending Your Return(p39)


rule
spacer

previous topic occurrence Amended/Corrected Tax Return next topic occurrence

If after filing your original return, you make a repayment, the repayment may reduce the amount of your qualified disaster recovery assistance distributions that were previously included in income. Depending on when a repayment is made, you may need to file an amended tax return to refigure your taxable income.
If you make a repayment by the due date of your original return (including extensions), include the repayment on your amended return.
If you make a repayment after the due date of your original return (including extensions), include it on your amended return only if either of the following apply.
taxmap/pubs/p575-009.htm#en_us_publink1000115382

Example.(p39)
spacer

You received a qualified disaster recovery assistance distribution in the amount of $90,000 on September 15, 2008. You choose to spread the $90,000 over 3 years ($30,000 in income for 2008, 2009, and 2010). On October 15, 2009, you make a repayment of $45,000. For 2009, none of the qualified disaster recovery assistance distribution is includible in income. The excess repayment of $15,000 can be carried back to 2008. Also, rather than carry the excess repayment back to 2008, you can carry it forward to 2010.
File Form 1040X, Amended U.S. Individual Income Tax Return, to amend a return you have already filed. Generally, Form 1040X must be filed within 3 years after the date of the original return was filed, or within 2 years after the date the tax was paid, whichever is later.
taxmap/pubs/p575-009.htm#en_us_publink1000115339

Repayment of Qualified Distributions for the Purchase or Construction of a Main Home(p39)


rule
spacer

previous topic occurrence Repayment of Qualified Distributions for the Purchase or Construction of a Main Home next topic occurrence

If you received a qualified distribution to purchase or construct a main home in a Midwestern disaster area, you can repay part or all of that distribution on or after the applicable disaster date, but no later than March 3, 2009, to an eligible retirement plan. For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made.
To be a qualified distribution, the distribution must meet all of the following requirements.
  1. The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA.
  2. The distribution was received within six months prior to the day after the applicable disaster date.
  3. The distribution was to be used to purchase or construct a main home in a Midwestern disaster area that was not purchased or constructed because of the severe storms, tornadoes, or flooding.
Amounts that are repaid before March 4, 2009, are treated as a qualified rollover and are not included in income. Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover.
A qualified distribution not repaid before March 4, 2009, may be taxable for 2007 or 2008 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions.
You must file Form 8930 if you received a qualified distribution that you repaid, in whole or in part, before March 4, 2009.
taxmap/pubs/p575-009.htm#en_us_publink1000115340

Loans From Qualified Plans(p40)


rule
spacer

previous topic occurrence Loans From Qualified Plans next topic occurrence

The following benefits are available to qualified individuals.
taxmap/pubs/p575-009.htm#en_us_publink1000115341

Qualified individual.(p40)


rule
spacer

You are a qualified individual if your main home was located in a Midwestern disaster area on the applicable disaster date and you had an economic loss because of the severe storms, tornadoes, or flooding. Examples of an economic loss include, but are not limited to:
taxmap/pubs/p575-009.htm#en_us_publink1000115342

Limits on plan loans.(p40)


rule
spacer

The $50,000 limit for distributions treated as plan loans is increased to $100,000. In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. If your main home was located in a Midwestern disaster area, the higher limits apply only to loans received during the period beginning on October 3, 2008, and before January 1, 2010.
taxmap/pubs/p575-009.htm#en_us_publink1000115343

One-year suspension of loan payments.(p40)


rule
spacer

Payments on plan loans outstanding on or after the applicable disaster date, may be suspended for one year by the plan administrator. To qualify for the suspension, the due date for any loan payment must occur during the period beginning on the applicable disaster date and ending on December 31, 2009.
previous pagePrevious Page: Publication 575 - Pension and Annuity Income - Relief for Kansas Disaster Area
next pageNext Page: Publication 575 - Pension and Annuity Income - How To Get Tax Help
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication