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Hurricane Rita, Wilma Victims read here
Old 12-30-2005, 11:06 AM   #1
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Hurricane Rita, Wilma Victims read here

Retirement Plan Tax Relief Extended to Rita, Wilma Victims

Congress has extended retirement plan tax relief to victims of Hurricanes Rita and Wilma. The Gulf Opportunity Zone Act of 2005 relaxes the tax rules; to benefit, the victims must have had their principal residence in the Rita disaster area as of Sept. 23, 2005 or in the Wilma disaster area as of Oct. 23, 2005. Similar relief already has been afforded to victims of Hurricane Katrina.

The law waives the usual 10-percent tax on early retirement plan distributions between Sept. 23, 2005 and Jan. 1, 2007 for Rita victims, and between Oct. 23, 2005 and Jan. 1, 2007 for Wilma victims -- on aggregate distributions not exceeding $100,000. Individuals receiving qualified hurricane distributions may spread out their taxation over a three-year period or recontribute to the plan without being taxed.

In addition, affected individuals may borrow up to $100,000 from their retirement plans (as opposed to the normal $50,000 limit), or the present value of the nonforfeitable accrued benefit of the employee under the plan -- whichever is less. The repayment due date is delayed for one year for a qualified individual with a payment due date on Dec. 31, 2006. The one-year period can be disregarded in determining the usual five-year repayment period.

An online version of the law is at txt.pdf.

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