Section 2700.780  Qualified Disaster Recovery Distributions

a)         A distribution of all or a portion of a Participant's Deferred Compensation Account shall be permitted in the event the Participant experiences a qualified disaster.

b)         To be eligible for a Qualified Disaster Recovery Distribution:

1)         A Participant's principal place of abode must be located in the qualified disaster area at any time during the incident period; and

2)         A Participant must have sustained an economic loss by reason of such qualified disaster.

c)         The term "qualified disaster area" means the area with respect to which the disaster was declared under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170).  The term shall not include any area which is a qualified disaster area solely by reason of section 301 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.

d)         The aggregate amount of distributions received by an individual, which may be treated as qualified disaster recovery distributions with respect to any qualified disaster in all taxable years, shall not exceed $22,000.

e)         The distribution request must be made on or after the first day of the incident period of a qualified disaster and before the date that is 180 days after the applicable date with respect to such disaster.

f)         The term "incident period" means, with respect to any qualified disaster, the period specified by the Federal Emergency Management Agency as the period during which such disaster occurred.

g)         The term "applicable date" means the latest of:

1)         The first day of the incident period with respect to the qualified disaster; or

2)         The date of the disaster declaration with respect to the qualified disaster.

h)         Any individual who receives a qualified disaster recovery distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution and in accordance with the requirements contained in Section 72(t)(11)(c) of the Internal Revenue Code as amended by the SECURE 2.0 Act of 2022 (26 U.S.C. 72(t)(11)(c)).

(Source:  Added at 49 Ill. Reg. 11174, effective August 25, 2025)