Some plans include a QBAD clause in the plan document that allows an in-service distribution in the event of a birth or adoption. Please use the normal distribution paperwork and elect "in-service". See below for more information:
What sources can a ptp use for a QBAD? QBADs are considered in-service distributions and would follow the plan provisions for in-service distributions.
Is the $5,000 net or gross? Net
Do they need to provide proof? Not to TTC, but if they are audited by the IRS they would need to provide the birth certificate or adoption documents.
How much in taxes are due? Only voluntary tax withholding, defaults to 10% but ptp can request 0%.
Can they recontribute the funds? Yes, within a 3 year period.