Retirement plan distributions and unemployment
Hello,
Can you tell me if/when an employee terminates, and a 401k loan is paid back from 401k proceeds; I believe that is considered a retirement plan distribution.
Will this retirement plan distribution be counted against you in seeking unemployment benefits? The participant lives and works in Colorado.
Mike
Permalink Submitted by Alan - IRA critic on Tue, 2017-08-15 19:27
This is an offset distribution, and the 1099R will be coded like a typical distribution, with the loan repayment taxable unless the person comes up with other funds to complete a 60 day rollover. Either way, qualification for UC benefits should not be affected as the loan distribution is not earned income.