Retirement Relief Available Amid Texas Floods

The Federal Emergency Management Agency issued a major disaster declaration for the state of Texas following a series of deadly storms, straight-line winds and widespread flooding that began on July 2.

The declaration, issued on July 6, enables affected Texans to access federal disaster assistance and unlocks a variety of financial relief options for retirement account holders and taxpayers impacted by the storms.

Texas Governor Greg Abbott expanded a state disaster declaration on July 5 to include several Texas counties, including Bexar, Burnet, Caldwell, Guadalupe, Travis and Williamson. On July 6, President Donald Trump approved a major disaster declaration, making federal assistance available to those in Kerr County.

In response to the disaster, the IRS is allowing eligible individual retirement account owners and employer-sponsored retirement plan participants to:

• Take qualified disaster recovery distributions;
• Recontribute qualified home purchase distributions they recently received but could not use due to the disaster; and
• Apply for plan loan relief and additional hardship distributions.

These options are available for a limited time following the disaster declaration.

The IRS may also announce extensions or relief for tax-related deadlines in affected areas, which will be posted on the IRS Tax Relief in Disaster Situations webpage as decisions are made.

The storms, which brought damaging winds and heavy rainfall across multiple counties in Texas, have resulted in more than 100 deaths, significant property damage and displacement. Emergency crews continue to respond to affected communities as recovery efforts ramp up.