Will Lump Sum Severance Affect Unemployment Eligibility
My question involves unemployment benefits for the state of: OHIO
My employment was terminated in January. My company has an over funded pension plan so they are paying severance using funds from the pension program. The lump-sum I received is based on weeks worked and was rolled directly into my 401K account. Since this is a pre-tax distribution,they will not be included in a a W-2 nor will taxes or social security be deducted until I withdraw money from the 401K.
Will these lump-sum funds impact my ability to collect unemployment. I had to sign a release of liability to get the funds.
Re: Will Lump Sum Severance Affect Unemployment Eligibility
No, 401(k) funds and other tax-deferred funds do not affect unemployment. If you were taking a distribution they might, but since you are not they will have no effect. In fact, since you cannot access them I'm not even certain you have to report them.
Re: Will Lump Sum Severance Affect Unemployment Eligibility
Usually, the weekly benefit certification form will have a question related to severance, pension plans, retirement, etc. Since they're calling it severance, I'd report it and ask the Ohio unemployment system people exactly what to do. I'd talk to a living human being in the system, and discuss it with them. They'll most likely tell you it's not reportable and won't be anything that will affect your weekly benefits, but I'd ask, just to be on the safe side.