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

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

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Issue Number: Tax Tip 2025-04