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So I have 60 days before I tell unemployment I took a withdraw?
I would be getting the IRA set up sooner than later and the full amount of the money, not just the after tax that you received, deposited into an IRA. Honestly we're not talking thousands and thousands of $$$ even if it wasn't done and your WBR was offset on a week of your payment. Didn't you mention on another thread it's $385?
It’s 355. I was just trying to get around my ui benefits getting halted for god knows how long. Can’t afford that rn.
Then you know what you have to do. Get an IRA set up and money deposited into it ASAP. Not sure if/how employer would or is required to report it to NJ UI. If it's truly 100% paid by you then I would think they shouldn't be reporting anything IMO but I'm not sure. and most times even if paid 100% by employee UI most times thinks at least a portion is paid into by the employer which in turn would throw a red flag which would require an explanation and proof on your end that 100% was paid into it by you.
All pretax contributions what are taken will show as income. The employer can report it on their regular unemployment tax filing or they may for terminated employee, report it immediately. The problem is the state will see it as income and act on it as income before they find out any mitigating circumstances from the claimant. Shouldn't impact benefits in the long run, but could cause a temporary suspension until it gets resolved.
Firstly, thanks for the advise. I am in a sort of similar situation but waiting for "PEUC" extension, exhausted by 26 weeks last month. My claim year is still open.
I will slightly go off the tangent, i have few questions:
1) Will rollover to Traditional IRA vs Roth IRA make a difference if/when i get the extension for UI ?
2) Do I have to report to CA - EDD if i rollover to a Roth IRA, since the taxes will be withheld?
3) Lastly, in my case i withdrew under CARES act; If I rollover the funds into an IRA and then chose later to take it out. Will those be subject to a 10 penalty? I read somewhere that you can do a 60 days rollover only once during a given taxable year. please correct me if i am wrong.
Thank you in advance.
Quote:
Originally Posted by scraprsmith
Yes even if you got the money. it's a shame you didn't know in advance and do a direct rollover from one financial company to the other, then the check would have never hit your hands first. But plenty of people do this type of rollover.
You have 60 days from the date you receive your retirement plan distribution to get it deposited into a qualified account; otherwise it will be a taxable event and also considered a distribution from a 401K for UI purposes.
Your 401(k) institution may send a paper check to you, to the institution where you are opening your IRA, or the money may be rolled over digitally via wire transfer.
Takeaway: If taxes are withheld from the distribution, you’ll need to use other funds in order to roll over the full amount. So if 20% taxes were withheld you will need to make sure the FULL amount that was distributed is rolled over.
actually from what i was reading if it is a cares act withdrawal you have three years to roll it over or you can even put it directly back into your 401k but i wonder how this would affect unemployment? https://www.forbes.com/sites/ashleae.../#162944854589
actually from what i was reading if it is a cares act withdrawal you have three years to roll it over or you can even put it directly back into your 401k but i wonder how this would affect unemployment? https://www.forbes.com/sites/ashleae.../#162944854589
That's the issue. Unemployment. If it is an IRA distribution it doesn't affect UI benefits. 401K distributions do affect UI benefits.
I have similar issue. Due to the uncertainty of UI extension, i panicked and ended up tapping into my retirement. I asked my Plan Administrator to issue a pretax check. I spoke to a lawyer yesterday and they did tell me that it would be considered an income for UI purpose. I am leaning towards putting my money in a short term IRA CD, given that i will be tapping into the funds later on during the year, and also not sure that i wanna risk losing any more funds by putting it back in the market.
Eventually when i'll take that distribution, 3 or 6 months from now, and I will have to have to pay taxes (Federal and State). Although, I am not sure about the 10 percent penalty for early withdrawal.
Do you think i would have to pay 10 percent penalty given the leeway under CARES act? Also, would you suggest Roth over Traditional IRA CD?
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