Penalty-Free Retirement Withdrawals for Domestic Abuse Victims
New legislation allows domestic abuse victims to withdraw up to $10,000 from retirement plans without additional tax penalties. This money can be used to escape and rebuild their lives. There is an option to repay the withdrawn amount within three years, which can help avoid taxation.
Key points
Allows penalty-free withdrawals of up to $10,000 or 50% of the retirement plan's value (whichever is less).
Withdrawals must occur within one year of being a victim of domestic abuse (physical, psychological, sexual, emotional, or economic).
Funds can be repaid to the retirement plan within three years, potentially avoiding taxation on the withdrawn amount.
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