Taxpayers Impacted by Hurricane Helene: SECURE Act 2.0 Allows Individuals to Access Retirement Savings After Natural Disasters
Under the SECURE Act 2.0, the rules governing access to retirement accounts in the wake of natural disasters were relaxed to allow penalty-free access in certain circumstances. If the disaster qualifies as a federally-declared disaster, taxpayers can access up to $22,000 per disaster without application of the 10% early withdrawal penalty. Further, the tax liability generated by the retirement account withdrawal can be spread over three years--and taxpayers can be given the option to repay the funds within three years of the withdrawal. The maximum loan amount for individuals experiencing a qualified disaster was also increased to $100,000. The expanded rules apply to any federally declared disaster occurring on or after January 26, 2021. President Biden has already approved major disaster declaration status for Florida and North Carolina. Emergency declarations were also approved for Tennessee, South Carolina, Georgia, Virginia, and Alabama. Federally declared disasters are those designated by FEMA at https://www.fema.gov/