Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

If I take lump sum from 401k will my ui be reduced In mass,

Customer Question
Good morning. If I...

Good morning. If I take lump sum from 401k will my ui be reduced In mass

Accountant's Assistant: Thanks. Can you give me any more details about your issue?

Just started receiving full payment of 720 per week , wanted to make 401k withdrawal to pay mortgage 50000

Submitted: 2 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 7 minutes by:
2/18/2016
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 years ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,390
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified

Hello

Although severance payments are required to be reported (they are looked at as wages) pension distributions are not.

You can see in the following that 401k is not considered wages

http://www.mass.gov/lwd/unemployment-insur/resources/regulations/for-businesses/dua-definition-of-wages-mgl-chapter-151a.html

Please remember to rate my service excellent once you have all the information you need. If you have any other questions, please ask me – I’ll be happy to respond. Thank you!

Ask Your Own Tax Question
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 years ago

Please respond below

Ask Your Own Tax Question
Customer reply replied 2 years ago
Hello. Is an early withdrawal of 401k considered income by unemployment it is not normal distribution im taking but early withdrawal of prior employees plan thank you sheera
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 years ago

That is a distribution form a retirement account and it is not wages. It does not matter if it is an early distribution or made when you are at retirement age. Not income for UI

I know rating takes an additional step and I truly appreciate it when you take the extra time!

Ask Your Own Tax Question
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 years ago

I hope that clarified for you.

Ask Your Own Tax Question
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 years ago

Just checking back

Ask Your Own Tax Question
Customer reply replied 2 years ago
hi robin,
I'm confused. I found the following information on another site. it looks like I will receive no ui if I withdrew 50,000Lump-Sum DistributionsIf you close the 401(k) account and take a lump-sum distribution, Massachusetts will subtract a pro-rated amount (again, at 50 percent of the total withdrawal) through the remaining period of your unemployment eligibility. If you have 10 weeks of unemployment remaining, for example, the state applies the offset to 10 percent of the distribution amount. If you find a job before all of the lump-sum distribution has been offset, the state may claim an overpayment. You will have to reimburse the balance, either all at once or through an installment agreement.
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 years ago

If you made all the contributions then the reduction would not be enforce.

Ask Your Own Tax Question
Customer reply replied 2 years ago
this was an employer plan contributed by both me and my prior employeer
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 years ago

Then Mass will reduce by a portion.

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Robin D. Your Own Question
Robin D.
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,390
18,390 Satisfied Customers
Experience: 15years with H & R Block. Divisional leader, Instructor

Robin D. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

18,390 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I want to take a lump sum distribution on my 401K to pay off
I want to take a lump sum distribution on my 401K to pay off my mortgage. Can you tell me the tax penalties involved brief description, so i can calculate if I will have enough left to pay it off. … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,680 satisfied customers
Starting April 2017 my husband is eligible to begin drawing
Good morning, starting April 2017 my husband is eligible to begin drawing from his previous employers pension that is being administered by the Pension BenefitGuaranty Corporation (PBGC). We are wonde… read more
ABC Accounting Group
ABC Accounting Group
Bachelor\u0027s Degree
848 satisfied customers
My husband lost his job and now he has $39,994. in his 401K.
My husband lost his job and now he has $39,994.69 in his 401K. We are thinking about taking this money out. After 20% we would get $31,995.76 There would be a 20% fee for taking it out early then we w… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,512 satisfied customers
I am 62 years old. I recently had to take disability
I am 62 years old. I recently had to take disability retirement. I have received disability approval from the Social Security Administration. I have approximately $250K in my 401K account. I need to w… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
I am being offered a lump sump payment of my retirement benefits
I am being offered a lump sump payment of my retirement benefits from my previous employer. I don't know whether I should take the lump sum, a partial lump sum, roll over to an IRA or 401K, or leave a… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
18,390 satisfied customers
Im 51 I received a notice from a former employer that they
Im 51 I received a notice from a former employer that they wanted to buy out my pension. This was not a 401k. They gave me 3 options. Lump sum. Receive a portion for the rest of my life starting now ,… read more
Megan C
Megan C
Certified Public Accountant (CPA)
Master's Degree
8,655 satisfied customers
Hi I have had an e-mail regarding the inherited 401k. I have
Hi I have had an e-mail regarding the inherited 401k. I have been advised that I can take periodic payments and withdraw all funds within 5 years or can take it over my life expectancy. They have now … read more
YourTaxDefender
YourTaxDefender
Licensed Tax Professional
8 satisfied customers
I am 55, and five months old. I am retiring, at age 56. I
I am 55, and five months old. I am retiring, at age 56. I owe $535,000 on my current home. It is appraised at $615,00 currently. I have $500,000 in IRA's, and $175,000 in personal funds. I want to pay… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,512 satisfied customers
I am in the position where I am being laid off from my company,
I am in the position where I am being laid off from my company, of which I have a pension plan. The numbers indicate it is best to begin collecting my pension now. I could take $1400 per month, or a l… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
18,390 satisfied customers
If I am collecting unemployment compensation in Massachusetts,
If I am collecting unemployment compensation in Massachusetts, can I withdraw my personal cash contribution to my pension plan without collection my pension until u/c runs out without causing a penalt… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
18,390 satisfied customers
The company that I work for was sold last year and the 401K
The company that I work for was sold last year and the 401K that was with that company was stopped (not my decision) and a new 401K started up with the new company. I need to take the lump sum from th… read more
Megan C
Megan C
Certified Public Accountant (CPA)
Master's Degree
8,655 satisfied customers
I am totally disabled from an in the line of duty as a police
I am totally disabled from an in the line of duty as a police officer accident. I just took a lump sum payment from a private disability carrier that was paid for by my employer(premiums), receive non… read more
Shawn P. Adamo
Shawn P. Adamo
CEO
Bachelor's Degree
18 satisfied customers
Im retired. can I take some of my 401k out in lump sum to
I'm retired. can I take some of my 401k out in lump sum to pay my mortgage off without a penalty or paying taxes at the higher income rate?… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
would it be to my advantage to receive a lumpsum rather than
would it be to my advantage to receive a lumpsum rather than the weekly $5000/week? I am asking about United States Income tax… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
Hello. I was laid off from my job 5 months ago and worked and
Hello. I was laid off from my job 5 months ago and worked and live in the state of New Jersey. I am 31 years old and my company had a pension plan to which they were the "sole contributor." The curren… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I know your not supposed to withdraw from your 401K ...
I know your not supposed to withdraw from your 401K account...ever.... but I have been ''swimming" for almost year juggling all bills - credit cards, installment loans and including my mortgage recent… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
I am looking to purchase a retirement home, specifically a ...
I am looking to purchase a retirement home, specifically a "hobby farm). I need $150,000 for the seller. I can just withdraw the $150,000 from my 401k. My understanding is that the company that manage… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
Your friend is celebrating his 30th. birtday today and ...
Your friend is celebrating his 30th. birtday today and wants to start saving for his retirement at age 65. He wants to be able to withdraw $4000 from his saving account on every month for 14 years fol… read more
Jim Revels
Jim Revels
Master's Degree
126 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x