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in NC can you cash your 401K and still receive unemployment benefits?

3 Answers

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  • 6 years ago
    Favorite Answer

    A 401K has nothing to do with unemployment benefits (in any state).

    Why would you want to cash it out? When it's in the 401K, it is not available to creditors and not required to be used for a BK.

    Once you cash it = you lose 10% (if you are under 59.5), must pay income tax on the money and it's no longer protected from creditors.

  • 6 years ago

    I had to cash it to live! my question is in NC will that affect my unemployment benefits. I just received the check and would like a sure answer to that question. I am 62 (next month) and I realize that my 401K didn't count against me as a 401K but need to know if it will be against my NC unemployment benefits.

  • Biff
    Lv 7
    6 years ago

    401k distributions are not earned income - you will have to pay income tax and possibly early withdrawal penalties on the 401k and unemployment benefits are ALSO taxable income on the Fed 1040, so make sure you put money aside for taxes - if you lost that job with the 401k, you should do a direct rollover to an IRA - it's easier to get the money out from there

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