IRA withdrawals and Unemployment benfits
Hello All –
Do IRA withdrawals impact unemployment benefits? If so are the rules based on state of residency?
Thank you!
Hello All –
Do IRA withdrawals impact unemployment benefits? If so are the rules based on state of residency?
Thank you!
Permalink Submitted by Alan Spross on Tue, 2012-01-31 17:02
IRA withdrawals do not impact UC benefits, however the collection of UC benefits for at least 12 consecutive weeks can result in a waiver of the 10% penalty on early IRA distributions up to the amount paid for medical insurance in the year of the IRA distribution.
Permalink Submitted by ShipsnGiggles on Tue, 2012-01-31 17:22
Alan Thank you for the reponse. Are you aware of any regulation and/or code section that states that IRA withdrawals don’t have an effect on UC? Thanks again
Permalink Submitted by Alan Spross on Tue, 2012-01-31 17:41
No, because the Regs would not attempt to list all the things that are unaffected. I suppose it is possible in a certain state to link the two, but I have never heard of such a situation. To be sure, you should check with your state UC office.
It would not make sense to have this restriction unless the state had a severe budget crisis, since extremely wealthy individuals losing very high paying jobs qualify for UC, and UC is often not enough to live on and many people take distributions just to supplement the UC.