I got denied my unemployment benefits in January and had to take my 401k out total of only $12,000 paid off medical bill and my car. Then I was able to appeal my unemployment and won so now I am receiving it but am not sure if I have to report I took my 401k and cashed it out since it was after they denied me. I contributed 5% and my employer contributed 4%. I live in Washington state.
ESD has no role in how you spend your retirement money. (You likely will be charged a 10% early withdrawal penalty unless you are over 59.5 years old. You may also owe income tax on the withdrawn money. However, those issues are between you and the IRS.)
What you do with your retirement funds has no bearing on whether you qualified for unemployment benefits. You do not have to tell ESD how you spend your retirement money.
It depends. If you cashed it out while you were not receiving benefits, you don't have to report it. However, if you claimed benefits for the week then you had to answer the question about whether you had received a payout from your retirements. It's one of the standard questions on the weekly reporting form. If you were claiming benefits you should have answered yes to the retirement question. Employment Security will then make an adjustment in the weekly amount based on the amount that your employer contributed to your 401K and how many years that retirement is supposed to last you. The adjustment may be as little as $5 or so per week depending on your age and how much your employer had contributed. If your 401k had no employer contributions, it won't affect your weekly amount. If you did not report it because you were denied benefits and then received a back payment for the week that you would otherwise have reported the retirement income, then you should call them and get it straightened out. If you should have reported it and don't, it can be fraud.
This answer is offered as a public service for general information only and may not be relied upon as legal advice.
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