Are disaster pension distributions taxed?

The short version

Many people assume money pulled from a retirement account after a hurricane or flood is tax free. Publication 575 says otherwise: if you received a qualified disaster recovery distribution it is taxable, but it is not subject to the 10% additional tax on early distributions. The relief is in the timing and the penalty, not in an exclusion. The publication says the special rules were made permanent by the SECURE 2.0 Act of 2022 and that Form 8915-F is used to figure and report the taxable portion.

What counts as a qualified disaster recovery distribution

Three tests apply. The distribution is made on or after the first day of the incident period of a qualified disaster and before the date 180 days after the applicable date. It is made to someone whose principal place of abode at any time during the disaster was in the qualified disaster area. And that person sustained an economic loss because of the disaster. A qualified disaster is a major disaster declared by the President under section 401 of the Stafford Act after December 27, 2020, and the incident period is the one FEMA specifies.

The applicable date is the latest of December 29, 2022, the first date of the incident period, or the declaration date. Economic loss is read broadly: damage to or destruction of property, loss related to displacement, or loss of livelihood from layoffs all count, and the distribution is allowed without regard to your need or the actual size of the loss. Eligible plans include 401(k) and other qualified plans, the federal TSP, 403(b) and governmental 457 plans, and traditional, SEP, SIMPLE and Roth IRAs.

The $22,000 limit

Your qualified disaster recovery distributions from all plans together are limited to $22,000 per disaster. If you take money from more than one type of plan, such as a 401(k) and an IRA, you may divide the limit among the plans by any reasonable method. Distributions beyond the limit may be subject to the additional tax on early distributions. The publication’s example: $16,000 taken in 2021 and $10,000 in 2022 for the same disaster means only $6,000 of the second distribution still qualifies if the whole first one is counted.

How the income is spread

A qualified disaster recovery distribution is included in income in equal amounts over 3 years, or you can elect to include all of it in the year you received it. The publication gives a clean illustration: an $18,000 distribution received in 2023 means $6,000 in each of 2023, 2024 and 2025, or the full $18,000 in 2023 if you elect. Which choice produces less tax depends on your other income in each of those years, which the publication leaves to you. The calculator above shows both choices and subtracts anything you repay.

Repaying the distribution

You can generally repay any part of the distribution that is eligible for tax-free rollover treatment to an eligible retirement plan, and you can also repay a distribution made on account of hardship. You have 3 years from the day after the date you received it, and the repayment cannot exceed the original amount. Amounts repaid are treated as a trustee-to-trustee transfer and are not included in income. You cannot repay distributions received as a beneficiary (other than as a surviving spouse), required minimum distributions, or certain periodic payments over 10 years or more, for life, or for joint lives.

In the publication’s example Maria receives $19,000 on February 15, 2025, then repays all of it on September 10, 2025 and reports both on Form 8915-F, so none of it is income on her 2025 return. Under the 3-year method, a repayment before filing reduces that year’s inclusion, and an excess repayment can be carried forward or back.

Related relief and limits

Separate rules let you recontribute a hardship or first-time homebuyer distribution you could not use to buy or build a main home because of the disaster, and qualified individuals may get a higher plan loan limit and a one-year suspension of loan payments. This page covers only the distribution rules in the 2025 publication. Which events qualify, and the exact dates, depend on the declaration for your disaster, so check the FEMA declaration and the Form 8915-F instructions.

Sources

• IRS Publication 575, Pension and Annuity Income (2025): Disaster-Related Relief; Qualified Disaster Recovery Distributions; Taxation of Qualified Disaster Recovery Distributions; Repayment of Qualified Disaster Recovery Distributions. Read November 2, 2026.

Edition read: Publication 575 (2025), for use in preparing 2025 returns. Dollar limits and dates in this publication are for 2025; check the current publication and form instructions for your tax year. This page summarizes the publication and does not replace it.