Once the money has been rolled over into my IRA, nobody will know where it originated. I'm just wondering if withdrawals from my IRA count as income as far as NYS unemployment is concerned. Thanks for replying.
Once the money has been rolled over into my IRA, nobody will know where it originated. I'm just wondering if withdrawals from my IRA count as income as far as NYS unemployment is concerned. Thanks for replying.
Severance money could not be rolled into an IRA. You could contribute the normal maximum contribution for the year, but that is all.
However yes, the IRS will know exactly where it came from. If its retirement money you will be issued a 1099-R with a distribution code G to indicate that its a rollover. The IRS will get a copy of that 1099 as well. If the termination money is not actually pension money, then you may get issued a W2 for that, which would make it earned income.
We might be getting into some specialized legalities. The severance money is called "STP", for special termination program. A couple years ago the Co. got permission to take these funds from their pension fund. I know for sure from the Co. website that I can roll it in its entirety into an IRA. So, does that mean it's not earned income? Thanks for your help.
For heaven's sake, do not let us or any information you get off a website be the final answer. You need to specifically ask the unemployment office in your state about YOUR situation specifically. The word pension raises red flags for someone your age. If it is an employer contribution retirement pension, and you receive it monthly, it is much more likely to affect your unemployment than an IRA or severance or anything else because for unemployment purposes, this is considered covered wages from the employer that they are still paying to you
The system would need to look at it, contact the employer, decide what it is to be considered, whether it will count and make their decision on this before you can continue to draw an unemployment claim. We can't say yes it will count, and affect your claim, or no it won't because we don't have enough of the specifics about this pension.
Each week when you are filing and make the certification for the week, there is a "pension" question. If you do anything with this money, you must answer this question yes and let the system get a decision on whether or not you will be eligible to receive benefits with the issues concerning this pension, taking out this money, whatever. If you take out or do anything with a pension it might turn out to be fraud if you fail to inform the system that you have taken it or begun receiving it. Let them decide whether they're going to consider it earned income. They can say for sure and legally. Write down when you discussed this and get the name of the person you talked with. Keep up with it for later.
Quote from the NY claimant handbook: "It is your responsibility to notify the Telephone Claims Center if you become eligible for a pension while receiving benefits. Failure to do so could result in an Overpayment Determination."
Whether you tell them or not, they will find out you have received/drawn out/done something with this money. If you have rolled it over into an IRA, it will make a difference, may not have an effect, but because you are of an age to begin receiving it as a monthly pension, it is much better for you to do anything with the money only after you have discussed it and cleared it with the system.
But my suggestion on this issue is this. Unemployment insurance lasts no more than 26 weeks. That's six months. Why not wait six months before you begin fooling with that other pension? Why take a chance? You are risking your unemployment benefits in the short run for slightly more money right now, when unemployment will end no matter what your circumstances after 26 weeks and you may certainly need the pension money more then. If you find another job quickly it won't be necessary and when you are back to work you can do whatever you need to with it.
I didn't realize that it was this complicated. I'm calling the unemployment office tomorrow. Thanks to everybody for the opinions.
Good. Waiting times are less on Thursday and Friday. Start calling early in the morning and be prepared to hold the phone till you get through to someone. Don't fail to write down who you talked to, when you made this call and what you were told and keep this information with your unemployment records. Question. Why are you still receiving unemployment benefits now if you were laid off last March anyway? When will they end?
No need to complicate this. It's an easy issue.
The answer is NO. Any withdrawals from a ROLLOVER IRA will have NO EFFECT on your unemployment benefits.
Again - the answer this is NOT earned income. Once rolled over, these monies are now your private retirement account and outside the pervue of NYSDOL.
OP has clearly stated this is NOT a pension. It IS or WILL BE a withdrawal from a rollover IRA the source of which was his pension account.
Once that money is in a private IRA, it is considered personal retirement monies - no matter the employer may be the source.
The only time this would be considered a "pension" would be if the money was not rolled over, but, instead, came directly from the company to OP as a weekly/monthly pension, or as a direct withdrawal from a 401k to which the employer contributed.
I agree with everything you say, as far as we know from here and from what it sounds like. (Though there is a slight question in my mind about this being from a withdrawal from an employer contribution vehicle and his being old enough to be receiving a pension, and his mentioning needing the money for his current expenses) But he needs to let them tell him this.
Not relevant once rolled over.
Age is irrelevant. "Pension" is the operative word. Many people draw pensions at a very young age - i.e. military. Once rolled over, this is not a "pension."
Why he needs the money is not relevant.
In my view, there is absolutely no need to muddy the waters, confuse the issue, and delay payment of benefits when the money (if rolled over) is clearly not a "pension" as that word is defined under UE law.
If OP is paid directly a company pension or directly withdraws from 401k, it will be reported on a 1099 - which NY will catch. Rollover IRA's and withdrawals therefrom do not interest the NYSDOL.
Even if the withdrawals (actually called distributions) from your IRA are taxed as earned income they will not be "wages" with regard to unemployment compensation.
As for severance, that affects unemployment compensation in two ways.
If you are paid severance within 30 days of termination it will delay your unemployment compensation (you should still file right away) for as many weeks as the state determines that the severance will cover and then you can collect up to 26 weeks.
However, if you are paid severance more than 30 after termination, the severance does not affect your unemployment compensation and you can collect right away.
Read the question about severance on the NY DOL website:
http://www.labor.ny.gov/ui/claimanti...plyfaq.shtm#19
I'll quote it here, too:
Q: How will dismissal or severance pay affect my Unemployment Insurance Benefits?
A: You may eligible to collect benefits under the following conditions: .
The weekly amount of dismissal/severance pay is less than the maximum weekly benefit rate
OR
The initial severance payment is made more than 30 days after the last day of your employment
OR
The dismissal/severance pay is stopped
AND
You have enough earnings in the base period to establish a claim.
You must notify the TCC if you receive or will receive dismissal severance pay. Failure to do so could result in an overpayment of benefits and other penalties.