The TSP has followed suit as it did for the recent hurricanes and is relaxing the rules governing hardship withdrawals to help those who were impacted by the wildfires in California.
Effective November 6, 2017, the TSP will treat any Financial Hardship In-Service Withdrawal Request (Form TSP-76) received by its office on or before March 8, 2018 as qualifying for a hardship withdrawal. The distributions must occur before March 15, 2018 to qualify for the relaxed rules.
Participants have to meet one of the following criteria:
The participant’s primary residence or place of employment is located in a covered disaster area and has incurred a loss as a result of the California wildfires OR the participant’s hardship withdrawal will be used to assist an eligible family member who lives or works in a covered disaster area and who has incurred a loss as a result of the California wildfires.
Additionally, participants must meet ALL of the following criteria:
- The participant must be actively employed with the federal government.
- The participant must complete Form TSP-76, Financial Hardship In-Service Withdrawal Request.
- The participant must write “California wildfires” at the top of page 1 above the name of the form.
- The participant must check the “Personal Casualty Loss” box on page 2, Item 18 of the request form, as the reason for requesting financial hardship.
- The participant request must be received by the TSP by March 8, 2018 and, in compliance with IRS guidelines, the distribution must occur before March 15, 2018. Any Financial Hardship In-Service Withdrawal Request forms received after March 8, 2018 will be processed as a standard hardship withdrawal, and the participant’s TSP contributions will automatically stop for 6 months.
If all requirements are met, the TSP will then waive the rule that prohibits a participant from making employee contributions for 6 months after taking a hardship withdrawal. This will allow an employee to continue to make contributions to the TSP and receive the employer match (if eligible). This temporary change will not be effective retroactively.
If the participant wants to stop TSP contributions, he or she must complete Form TSP-1 or use the applicable automated system.
Extended Deadline for Hurricane Maria Victims
The TSP also announced that the deadline has been extended to March 8, 2018 for victims of Hurricane Maria to apply for a hardship withdrawal. The distributions must occur before March 15, 2018.