skip navigation

Search Help
Navigation Help

Topic Index
ABCDEFGHI
JKLMNOPQR
STUVWXYZ#

FAQs
Forms
Publications
Tax Topics

Comments
About Tax Map

IRS.gov Website
Publication 590
taxmap/pubs/p590-024.htm#en_us_publink1000240616

Tax Relief for Midwestern Disaster Areas(p73)

rule
See Tables 1 and 2 in Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas, for a list of the Midwestern disaster areas and the applicable disaster dates.
Special 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. 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.
Form 8930, Qualified Disaster Recovery Assistance Retirement Plan Distributions and Repayments, is used to report qualified disaster recovery assistance distributions and repayments.
For information on other tax provisions related to these storms, tornadoes, or flooding, see Publication 4492-B.
taxmap/pubs/p590-024.htm#en_us_publink1000240620

Qualified Disaster Recovery Assistance Distribution(p73)

rule
A qualified disaster recovery assistance distribution is any distribution you received from an eligible retirement plan 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 could also have been designated as a qualified disaster recovery assistance distribution.
taxmap/pubs/p590-024.htm#en_us_publink1000240622

Distribution limit.(p73)

rule
The total of your qualified disaster recovery assistance distributions from all plans was limited to $100,000. If you had distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you could have allocated the $100,000 limit among the plans any way you chose.
taxmap/pubs/p590-024.htm#en_us_publink1000240624

Taxation of Qualified Disaster Recovery Assistance Distributions(p73)

rule
Qualified disaster recovery assistance distributions are included in income in equal amounts over three years. However, if you chose, you could have included 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 received 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/p590-024.htm#en_us_publink1000240625

Repayment of Qualified Disaster Recovery Assistance Distributions(p73)

rule
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 later 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/p590-024.htm#en_us_publink1000240626

Repayment of distributions if reporting under the 1-year election.(p74)

rule
If you chose 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/p590-024.htm#en_us_publink1000240629

Repayment of distributions if reporting under the 3-year method.(p74)

rule
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 2010 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 2010. If you repay a portion after the due date (including extensions) for filing your 2010 return, the repayment will reduce the portion of your distribution that is includible in income for the year it was repaid, the excess may be carried forward or back to reduce the amount included in income for the year to which it was carried.
taxmap/pubs/p590-024.htm#en_us_publink1000240630
Example.(p74)
Brian received a $90,000 qualified disaster recovery assistance distribution from his pension plan on October 15, 2009. He does not elect to include the entire distribution in his 2009 income. Without any repayments, he would include $30,000 of the distribution in income on each of his 2009, 2010, and 2011 returns. On October 30, 2010, Brian repays $45,000 to an eligible retirement plan. He makes no other repayments during the 3-year period. Brian may report the distribution and repayment in either of the following ways.
taxmap/pubs/p590-024.htm#en_us_publink1000240631

Exceptions.(p74)

rule
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/p590-024.htm#en_us_publink1000240632

Amending Your Return(p74)

rule
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/p590-024.htm#en_us_publink1000240633
Example.(p74)
You received a qualified disaster recovery assistance distribution in the amount of $90,000 on September 15, 2009. You choose to spread the $90,000 over 3 years ($30,000 in income for 2009, 2010, and 2011). On October 15, 2010, you make a repayment of $45,000. For 2010, none of the qualified disaster recovery assistance distribution is includible in income. The excess repayment of $15,000 can be carried back to 2009. Also, rather than carry the excess repayment back to 2009, you can carry it forward to 2011.
File Form 1040X to amend a return you have already filed. Generally, Form 1040X must be filed within 3 years after the date the original return was filed, or within 2 years after the date the tax was paid, whichever is later.