topic Re: 401K Hardship Withdrawals? in Personal Finance

401K Hardship Withdrawals?

soxfaininfl — Tue, 11 Jan 2022 22:13:04 GMT

I have made 2 harship withdrawals to pay for my son's education expensens in the past 6 months and both times I wasn't asked to submit the proof (even though it initially says to have some before I make the reqeust). Do they come back later to ask for it? If they do how much later? I just want to know if I need to save the proof of the expenses and for how long? My 401K is throuh Fidelity.

Re: 401K Hardship Withdrawals?

pizzadude — Wed, 12 Jan 2022 00:02:09 GMT

Yes, I'd keep the supporting documentation along with any other receipts, bank statements, etc. you'd need to support filing your taxes.

Re: 401K Hardship Withdrawals?

Anonymalous — Wed, 12 Jan 2022 01:53:06 GMT

It's an IRS issue, I don't think Fidelity cares. Strongly recommend starting your taxes very early this year. If there's some paperwork you need to get, April 13th would be a very bad day to find out. And like all other tax stuff, you should keep it for a minimum of 7 years.

Re: 401K Hardship Withdrawals?

Anonymous — Thu, 20 Jan 2022 01:35:09 GMT

I have my son's 529 with Fidelity. Although this isn't a 401K, whenever I've called in to request withdrawals to pay his tuition, they simply ask the reason for the distribution. To date, Fidelity hasn't asked for any documentation.

Re: 401K Hardship Withdrawals?

FinStar — Tue, 15 Feb 2022 19:58:26 GMT

@Anonymous wrote:
It's a good idea to hold onto the proof, regardless of whether they ask for it, for 7 years for tax purposes.

I would. Every once in a while you hear of some not-so-pleasant IRS situations when there is the absence of supporting documentation, especially during an audit.

Re: 401K Hardship Withdrawals?

hdporter — Sun, 27 Feb 2022 05:54:18 GMT

@soxfaininfl wrote:
I have made 2 harship withdrawals to pay for my son's education expensens in the past 6 months and both times I wasn't asked to submit the proof (even though it initially says to have some before I make the reqeust).

See the following discussion of this topic: IRS: Self-Certification Permitted for Hardship Withdrawals

Employees no longer routinely have to provide their employers with documentation proving they need a hardship withdrawal from their 401(k) accounts, according to the Internal Revenue Service (IRS). Employees do, however, need to keep source documents, such as bills that resulted in the need for hardship withdrawals, in case employers are audited by the IRS, the agency said.