Puerto Rico Treasury Department Extends Period To Make Hurricane-Related Retirement Plan Distributions

Author:Ms Ana María Bigas-Kennerley
Profession:Littler Mendelson
 
FREE EXCERPT

Last year, the Puerto Rico Department of the Treasury (the "PR Treasury") issued Administrative Determination Number 17-29 ("AD 17-29") to provide rules and procedures for allowing distributions from an IRA or a Puerto Rico qualified retirement savings plan following Hurricane María. The purpose of these relaxed tax rules is to temporarily allow Puerto Rico residents impacted by the hurricane to make distributions from qualified retirement plans and IRAs at a preferential tax rate. The PR Treasury subsequently issued Administrative Determination Number 18-02 on January 17, 2018, to clarify certain provisions of AD 17-29.

Pursuant to AD 17-29, distributions from a qualified plan or an IRA on account of Hurricane María could be made from September 20, 2017 until June 30, 2018 (the "eligible period").

On July 31, 2018, the PR Treasury issued Administrative Determination Number 18-13 ("AD 18-13") extending the eligible period until November 30, 2018 to make eligible distributions pursuant to AD 17-29 and 18-02. All other provisions under AD 17-29 and AD 18-02 remain in effect.

Eligible Distributions Made in the Extension Period but Prior to the Publication of AD 18-13

Pursuant to AD 18-13, eligible distributions received between July 1, 2018 and the date of the publication of AD 18-13 (the "special period") may be considered eligible distributions on account of Hurricane María, to the extent such distributions comply with the requirements established under AD17-29, 18-02, and AD 18-13.

Distributions from Qualified Plans

Distributions from qualified plans during the special period may be considered eligible distributions if the following two conditions are satisfied:

The participant submits to the plan administrator the sworn statement required pursuant to AD 17-29 and AD 18-02, no later than September 28, 2018, or any subsequent date that the plan administrator establishes for such purposes. The tax withholding has been made and deposited with the PR Treasury for at least 10% of the taxable...

To continue reading

REQUEST YOUR TRIAL