December 1, 2005 – The IRS has issued Notice 2005-92, which provides additional guidance on Hurricane Katrina relief under Sections 101 and 103 of the Katrina Emergency Tax Relief Act of 2005 (KETRA). Included in the guidance is the assertion that substantially equal periodic payments under IRC Sec. 72(t)(2) and required minimum distributions (RMDs) are not eligible for recontribution to a savings arrangement, even though for certain purposes those distributions are permitted to be treated as KETRA distributions. Similarly, according to the notice, any Katrina distribution paid to a qualified individual as a beneficiary cannot be recontributed. Conversely, while hardship distributions from employer plans are not eligible rollover distributions, if such a distribution satisfies certain requirements of Notice 2005-92, the distribution is not treated as made on account of hardship and is permitted to be recontributed to an eligible retirement plan.
Other provisions contained in Notice 2005-92 include guidance on reporting of Katrina distributions and recontributions, tax treatment, etc. Notice 2005-92 may be found at http://www.irs.ustreas.gov/pub/irs-drop/n-05-92.pdf.