Tax Tip 2025-04: Access retirement funds in a disaster

Internal Revenue Service (IRS) sent this bulletin at 01/13/2025 01:27 PM EST

IRS Tax Tips

Jan. 13, 2025

Issue Number: Tax Tip 2025-04

Access retirement funds in a disaster

The SECURE 2.0 Act makes it easier for qualified individuals impacted by a federally declared major disaster to access their retirement savings.

Eligibility

A taxpayer may be eligible for relief that provides for expanded access to their retirement funds if their principal residence was in a major disaster area and they sustained an economic loss due to that disaster. An economic loss includes, but is not limited to:

Being displaced from the taxpayer’s principal residence.
Loss or damage to or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause.
Lost income due to temporary or permanent layoff.

Use the tool on FEMA.gov/Disaster to find a current list of major disaster declarations.

Types of relief

These types of disaster relief are available to people who qualify:

May withdraw up to $22,000 from an IRA or other eligible retirement plan.
- Amount exempt from the 10% early distribution tax.
- May repay to a retirement plan or IRA within three years of the distribution.
- Distribution may be included equally in income over three years.
A retirement plan may offer increased loan limits and delay repayments.

The IRS is here to help

For questions and assistance, call the IRS disaster hotline at 866-562-5227.

More information

Subscribe to IRS Tax Tips

Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov.

This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message.

Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your Subscriber Preferences Page. You will need your email address to log in. If you have questions or problems with the subscription service, visit subscriberhelp.govdelivery.com.

This service is provided to you at no charge by the Internal Revenue Service (IRS).

Tax Tip 2025-04: Access retirement funds in a disaster

Useful Links:

News Essentials

The Newsroom Topics

IRS Resources

Issue Number: Tax Tip 2025-04