In determining the amount available for a hardship withdrawal, you must first determine what the plan provides in regard to the contribution sources are allowed.  This information can be found in the Summary Plan Description or from your Plan Administrator.  The plan can restrict the hardship distribution to certain contribution sources or allow a hardship distribution from all contribution sources.

The next step is to determine what amount is available for distribution from the allowed contribution sources.  If the contribution is subject to a vesting schedule, then only vested portion is available for distribution.  While elective deferrals and Roth contributions are not subject to a vesting schedule, they are restricted to only the amount of the actual contributions, without earnings, reduced by any previous distributions of such contributions.

Finally, the amount that can be taken out of the plan is further limited by the amount of the financial need, including any taxes that you will incur due to the hardship distribution, even if more than that amount is available in your account. 

For help in determining how much may be withdrawn from your account, please contact your Nyhart consultant.

This article was last updated on January 26, 2012