You may request a hardship withdrawal from your Guideline 401(k) for qualified hardships. Guideline will review your request, taking into account all relevant facts and circumstances in determining whether your financial need qualifies.
Hardship withdrawals are subject to income taxes, plus an additional 10% tax for early distribution if you are under the age of 59 ½. Employees who take a hardship distribution cannot repay it back to the plan. As such, a hardship withdrawal will permanently reduce the value of the benefits you will receive at retirement.
To find out if you might be eligible or to apply for a hardship withdrawal, please contact email@example.com.
The following are deemed a “Qualified Hardships” and may make you eligible to receive a hardship withdrawal:
- Expenses for medical care (described in Section 213(d) of the Internal Revenue Code) either previously incurred by you, your spouse or your dependent or necessary for you, your spouse or your dependent to obtain medical care.
- Costs directly related to the purchase of your principal residence (excluding mortgage payments).
- Tuition, educational fees, and room and board expenses for the next twelve (12) months of post‑secondary education for yourself, your spouse or your dependent.
- Amounts necessary to prevent your eviction from your principal residence or foreclosure on the mortgage of your principal residence.
- Payments for burial or funeral expenses for your deceased parent, spouse, children or other dependents.
- Expenses for the repair of damage to your principal residence that would qualify for the casualty deduction under the Internal Revenue Code.
If you have any qualified hardship expenses, a hardship distribution can only be made if you confirm that the following conditions have been met:
- You have an “immediate and heavy financial need.”
- A financial need may be immediate and heavy even if it was reasonably foreseeable or voluntarily incurred.
- You have exhausted all other options and you lack other available resources.
- The amount requested is not more than the amount needed to relieve your financial need.
- The amount needed should take into account any other resources reasonably available to you.
- The amount needed may include any amounts necessary to pay any taxes or penalties reasonably anticipated as a result of your hardship withdrawal.
- You will not make any salary deferrals for at least six (6) months after you receive the hardship withdrawal.
The following limitations apply to hardship distributions:
- The minimum amount you can request as a hardship distribution is $1000
- You can receive no more than 2 hardship distributions during a Plan Year.
- Generally, you may only withdraw money within your 401(k) account that you invested as salary contributions. Employer contributions and earnings on your investment may not be used for hardship withdrawals.