Your UI will not be affected it is not needs based in any state in the country. If you and your termination qualifies you you could have $1billion and it wouldn't be affected.
Your UI will not be affected it is not needs based in any state in the country. If you and your termination qualifies you you could have $1billion and it wouldn't be affected.
From what I understand receiving lump sum 401k payout is considered pension in New Jersey and affects unemployment.What does needs based refer to? This is all foreign to me. I’ve never been without a job so I’m still in a bit of shock. Thanks.
But you aren't getting a lump sum 401K pay out. You are rolling the money into an IRA.
Needs based = eligibility is based on need.
Unemployment is NOT needs based. You can qualify for unemployment if you won the lottery the week before, and you can fail to qualify if your next move is a relocation to a cardboard box at the corner of Third and Maple. It doesn't matter if you need the UI or not; you get it if you need the qualifications and you don't get it if you don't
If you roll over your 401(k) into another qualified plan of any kind, it will not affect your unemployment. Period. i don't know how to make it any more clear than that.
If you cash it out, you will pay a penalty AND you will pay taxes at the end of the year, unless you are at least 59 1/2.
Understood. Sorry for the confusion on my end.Thanks
Early withdrawal of your 401K is NOT a pension for unemployment insurance purposes. But if you want to really cover your bases, call the system, talk with a living human being, and ASK THEM. There is some way you can get in, if they still have walk in offices, so much the better. But be sure you write down the name of the person you speak with in the system, the date you spoke with them, and what they will tell you. Which I strongly strongly think will be that no, you do not have to report the withdrawal you made from your 401K, as a pension, which it is not, or wages, which it is not, or money made from work performed. Don't take our word for it. If you were to report it, it will stop your claim and you will be required to recontact them and they will go through the whole exercise of trying to determine what this is, you won't be paid again until they have made the decision. And I am very sure they will not find it to be disqualifying money which should have been reported. As everyone has told you, unemployment insurance is not needs based, they did not ask you about your husband's income or other assets when you filed your claim, they do not care about your family income, this is not welfare, it is an insurance for people who are out of work through no fault of their own.
Yes, it is a problem that you want to do this, in that it is the worst possible way to come up with emergency income, but many people find it necessary to do this, but it's not going to prove to be a problem for unemployment insurance.
Would you stop with your TN rules affecting what you tell people. In NJ, a 401K with employer money in it IS treated as a pension.
www.nj.gov/labor/ui/content/faq.html
"The term "pension" includes benefits paid in a lump sum, such as 401K, as well as pensions that are paid on a monthly basis. If you have applied, received or expect to receive a pension, a claims examiner appointment will be scheduled to discuss the pension. If you contributed the entire cost of your pension, your unemployment benefits will not be reduced. If you and your employer contributed to the pension, 50% of your weekly pension amount will be subtracted from your unemployment benefits. If your employer contributed the entire cost of your pension, your unemployment benefits will be reduced by 100% of your weekly pension amount."
She doesn't need to call them because it's spelled out right on the webpage, and the formula that is used.
However, money out of an IRA does not count, and why rolling the 401K into an IRA is the right thing to do if you must have the money.
I just want to reiterate for the OP - it is NOT considered a distribution for unemployment purposes if you roll it into an IRA, another pension plan, or some other qualified plan.