• Unemployment eligibility varies from state to state, but generally if you have current income from some other source your unemployment benefits are correspondingly reduced or eliminated. I think it would be wrong to have the 401(k) money counted as income to you now (since it was deferred pay for past work, not current earnings), without any information about what state your are in, I can only recommend that you contact the unemployment office and determine why your check was withheld and whether payments will resume.
  • The money in a 401K IS income. When the money was earned taxes were never paid on that money and it was not available to be used for other purchases. When you cash in a 401K you are finally receiving that income on which you will then have to pay taxes and it is recorded as income. Pulling money out of conventional savings is completely different because you presumably already paid income taxes on that money and it is NOT income but drawn from your own money.

Copyright 2020, Wired Ivy, LLC

Answerbag | Terms of Service | Privacy Policy