The Bipartisan Budget Act of 2018 was signed on February 9, 2018. The act contains disaster relief relating to the California Wildfires.
- Qualified Wildfire Distributions: An affected individual may take a distribution up to $100,000. The additional 10% tax on early distributions imposed by Sec. 72(t) will not apply for qualified wildfire distributions. Income inclusion as a result of the distribution may be spread over a 3 year period, starting in the first year the distribution is required to be included as income.
- Repayments: An affected individual receiving a qualified wildfire distribution may repay the distribution to a qualified plan over a period of 3 years, starting on the date after the day the distribution is received. This will be treated as a rollover being transferred within 60 days of the distribution.
- Loans: The loan limit for a qualified individual from a qualified employer plan is increased from $50,000 to $100,000. This is in effect from February 9, 2018 to December 31, 2018. The repayment of loans for qualified individuals made between October 8, 2017 and December 31, 2018 may be delayed for 1 year.