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Budget Reconciliation Act contains 401(k) provisions

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in Office Management,Payroll Management

The Bipartisan Budget Reconciliation Act of 2018 (P.L. 115-123) keeps the lights on for the federal government. The short-term government spending bill, signed Feb. 9, also picks up some 401(k) provisions that were stripped from the Tax Cuts and Jobs Act (TCJA), and provides more disaster relief to the victims of the California wildfires. Plans will need to be amended to account for this relief.

Hardship distributions. The Budget Act picks up three key provisions regarding hardship distributions. Key: Hardship distributions remain discretionary with plans.

Plans that allow employees to take hardship distributions must prohibit them from contributing into their accounts for six months. The Budget Act directs the IRS to modify these rules by allowing employees to continue to make pretax contributions into their 401(k) accounts. New regulations will apply to plan years beginning after Dec. 31, 2018.

Employees can take hardsh...(register to read more)

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