In general
If an eligible automatic contribution arrangement allows an employee to elect to make permissible withdrawals—
(A)#
the amount of any such withdrawal shall be includible in the gross income of the employee for the taxable year of the employee in which the distribution is made,
(B)#
no tax shall be imposed under section 72(t) with respect to the distribution, and
(C)#
the arrangement shall not be treated as violating any restriction on distributions under this title solely by reason of allowing the withdrawal.
In the case of any distribution to an employee by reason of an election under this paragraph, employer matching contributions shall be forfeited or subject to such other treatment as the Secretary may prescribe.