Save time with our cheat sheets, fact sheets, checklists & books!

January 20, 2023

Domestic abuse distribution

Your Guide

Print

Domestic abuse distribution

A distribution taken from an employer plan for domestic abuse purposes

A domestic abuse distribution is one that is made to domestic abuse victim, during the 1-year period beginning on any date on which the individual is a victim of domestic abuse by a spouse or domestic partner. An employee may self-certify that they qualify for a domestic abuse distribution.

A domestic abuse distribution for a participant is capped at the lesser of (a)$10,000 or (b)50% of the participant’s vested account balance. The $10,000 limit is adjusted for inflation, inflation as of 2025.

Domestic abuse distributions may be made from an applicable retirement plan.

Domestic abuse defined

Domestic abuse means physical, psychological, sexual, emotional, or economic abuse, including efforts to control, isolate, humiliate, or intimidate the victim, or to undermine the victim’s ability to reason independently, including by means of abuse of the victim’s child or another family member living in the household.

No 10% early distribution penalty

The 10% early distribution penalty is waived for domestic abuse distributions

IRC § 72(t)(2))(K)

Withholding and repayment rules

The notice requirements and the 20% withholding that applies to rollover-eligible distributions do not apply to domestic abuse distribution, and the amount or any portion of it may be repaid within three years, to an applicable eligible retirement plan. An applicable eligible retirement means an eligible retirement plan other than a defined benefit plan.

The domestic abuse distribution provision was introduced under SECURE Act 2.0, and is effective for distributions made after 2023

 

 

 

More

Keep Learning

Eligible retirement plan

The term “eligible retirement plan”, means a retirement plan to which a rollover contribution can be made. These are: (i)an individual retirement account described in

Qualified See-Through Trust beneficiary

Definition A qualified trust beneficiary is a trust that satisfies the requirements so as to be treated as a designated beneficiary.   For retirement accounts inherited

Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Excess deferral

Definition Salary deferral contributions, contributions are limited to the lesser of the IRC § 402(g) limit or 100% of compensation. Salary deferral contributions in excess

Be among the first to know when

IRA Rules
Change