Yes! You can use AI to fill out Explanation of Hardship and Supporting Documentation

Applicants often provide a general explanation like 'financial trouble' instead of a specific, qualifying reason. This happens when they don't understand the strict IRS criteria for a hardship withdrawal. A vague application will be denied for failing to demonstrate an 'immediate and heavy financial need,' delaying access to funds. To avoid this, clearly state the specific qualifying event (e.g., 'payment for a specific medical procedure dated MM/DD/YYYY') and ensure it aligns with plan rules.

A common error is requesting more money than is necessary to satisfy the financial need. People may miscalculate the amount or try to withdraw extra funds for non-hardship purposes. This can lead to the request being denied or reduced, and the applicant may face unnecessary taxes and penalties on any excess amount approved. To prevent this, calculate the exact amount required to cover the specific hardship and check if your plan allows including estimated taxes in the withdrawal amount.

The form requires certifying that you 'have obtained' the necessary supporting documentation. People often sign this prematurely, assuming they can gather the documents later. If the plan administrator requests the documents and they cannot be provided promptly, the withdrawal will be denied, and the process must be restarted. Always collect all required invoices, estimates, and notices *before* you sign and submit the application.

This occurs when the written explanation of the hardship does not align with the details in the supporting documents, such as dates, amounts, or the nature of the expense. This mistake, often due to carelessness, creates a major red flag for reviewers. It results in an immediate denial of the request and can complicate future applications. To avoid this, meticulously cross-reference your written statement with every detail in your supporting paperwork to ensure they tell the exact same story.

Forgetting to sign or date the form is a frequent and easily avoidable oversight, usually caused by rushing to complete the paperwork. An unsigned or undated form is legally invalid and will be immediately rejected by the processing department. This forces the application to be returned and resubmitted, causing significant and frustrating delays. Always perform a final check of the entire form, paying special attention to the signature and date fields before submission.

When a form is only available as a non-fillable PDF, people often fill it out by hand with illegible handwriting. This can lead to data entry errors by the processor, delays while they request clarification, or outright rejection of the form. To ensure clarity, it's best to type your responses. AI-powered tools like Instafill.ai can convert flat PDFs into fillable forms, allowing you to type directly and ensure your submission is perfectly clear and professional.

Mistakes like transposing digits in a Social Security Number or account number, or misspelling a name, are common data entry errors. This prevents the plan administrator from locating the correct account, causing the application to be rejected and returned. To prevent this critical error, carefully double-check all personal information against an official account statement. Using a tool like Instafill.ai can also help by securely storing and accurately auto-filling this information, reducing the risk of manual mistakes.

Many retirement plans mandate that a participant must first take any available loan from their account before being eligible for a hardship withdrawal. Applicants are often unaware of this rule or may prefer a withdrawal, leading them to skip this step. This results in an automatic denial of the hardship request until the loan process has been completed. Before applying, review your Summary Plan Description (SPD) or contact the plan administrator to confirm if you must apply for a loan first.

Applicants sometimes use an old form they saved on their computer or found through a search engine, rather than getting it from the official source. Plan administrators update forms periodically to comply with new regulations or change internal processes. Submitting an outdated form will lead to rejection, forcing you to start the entire process over with the correct version. Always download the most current form directly from the Empower Retirement website or participant portal.