Domestic Abuse Victims and Retirement Distributions

May, 19 2025 by Lisa Brugman, EA

Understanding Disaster Distribution Rules for Retirement Accounts and the NEW Rule for Domestic Violence

When life throws a curveball — whether it’s a natural disaster or a personal crisis — having access to your retirement savings without facing steep penalties can offer much-needed relief. That’s where disaster distribution rules for retirement accounts come in. These special provisions are designed to help people cope with emergencies while minimizing financial strain.

In this blog, we’ll break down the basics of disaster distributions, explore how they work, and take a closer look at a new rule that’s empowering survivors of domestic violence to access their funds more safely.
 

What Are Disaster Distributions?

Disaster distributions are a type of early withdrawal from retirement accounts (such as a 401(k) or IRA) that allow individuals affected by a federally declared disaster to access their retirement savings under more favorable tax conditions.
 

Why They Matter

Ordinarily, pulling money from your retirement account before age 59½ triggers a 10% early withdrawal penalty, in addition to income taxes. But for people in crisis, that penalty can be a major hurdle.

To ease this burden, Congress introduced qualified disaster distribution rules that waive the penalty and offer flexible repayment options. These provisions were especially helpful during major disasters like hurricanes, wildfires, and more recently, the COVID-19 pandemic.
 

Key Benefits of Disaster Distributions

If you qualify, you’ll enjoy several important advantages:

• No 10% Early Withdrawal Penalty: Withdraw up to $100,000 penalty-free.
• Spread the Tax Burden: Taxes on the distribution can be spread over three years.
• Optional Repayment: You have up to three years to repay the amount, which would essentially reverse the tax consequences.

Who Qualifies?

To be eligible, you must:

• Reside in a federally declared disaster area.
• Have suffered a financial loss due to the disaster.
• Take the distribution within a specified time window following the event.

The IRS usually provides detailed guidelines when each qualifying disaster occurs.
 

A New Addition: The Domestic Violence Exception

In a significant step forward, the SECURE 2.0 Act of 2022 introduced a new category of qualified withdrawal—this time, for victims of domestic abuse. The rule officially went into effect on January 1, 2024.

In the U.S., domestic abuse (also called domestic violence) is broadly defined by the government as a pattern of abusive behavior in any relationship that is used by one partner to gain or maintain power and control over another intimate partner. It can happen to anyone regardless of race, age, gender, sexual orientation, or income.

Here’s how the U.S. government (including the Department of Justice and other federal agencies) defines it in detail:
 

Types of Abuse Considered Domestic Abuse:

1. Physical Abuse
   • Hitting, slapping, shoving, grabbing, pinching, biting, hair pulling, etc.
   • Denying medical care or forcing alcohol/drug use.
2. Sexual Abuse
   • Coercing or attempting to coerce any sexual contact or behavior without consent.
   • Includes marital rape, attacks on sexual parts of the body, and unwanted sexual advances.
3. Emotional Abuse
   • Undermining a person’s sense of self-worth or self-esteem.
   • Constant criticism, name-calling, damaging relationships with others.
4. Economic or Financial Abuse
   • Making or attempting to make a person financially dependent.
   • Withholding money, controlling financial resources, forbidding work or education.
5. Psychological Abuse
   • Causing fear through intimidation.
   • Threats of physical harm, destruction of pets or property, and isolation from loved ones.
6. Technological Abuse
   • Use of technology to stalk, harass, or intimidate.
   • Monitoring devices, GPS tracking, controlling social media access.
7. Stalking
   • Repeated, unwanted attention and contact that causes fear or concern for safety.

Protected Relationships Include:

• Spouses or former spouses
• Dating partners
• Parents of the same child
• Cohabitants
• Family members in some contexts

Why This Rule Was Added

Financial abuse is a common tactic in domestic violence situations but is not the only type of abuse received. Many survivors are kept dependent on their abuser through restricted access to money and financial resources. In these cases, having the ability to withdraw retirement funds can literally be a lifeline — providing the means to escape, relocate, or seek legal and emotional support.

Lawmakers recognized this gap and took action to ensure that financial need wouldn't stand in the way of personal safety.
 

How the Domestic Violence Rule Works

Here are the main points of the new provision:

• Maximum Withdrawal: Up to $10,000, or 50% of the vested account balance (whichever is less).
• No Early Withdrawal Penalty: Like with disaster distributions, the 10% penalty is waived.
• Tax Benefits: The withdrawn amount is still taxable, but it can be repaid within three years to avoid income tax.
• Timeframe: The withdrawal must occur within one year of the abuse incident.

Importantly, no court documentation is required. The rule is based on self-certification, which reduces the barrier for individuals in urgent or unsafe situations.
 

Final Thoughts

Life’s emergencies — whether natural or deeply personal — shouldn't leave you financially stranded. These distribution rules reflect a growing recognition that retirement funds can and should be a resource during times of crisis.

The addition of the domestic violence withdrawal provision marks a powerful shift toward compassion and accessibility in financial legislation. If you or someone you know is facing such a situation, know that support is available—not just emotionally, but financially as well.




If you’re looking for more info for legal, support, or safety reasons, you can check out: