Does cashing out profit shares from former employer affect my EDD benefits?

Thanks for responding! I just checked and it's part of our company's qualified 401k retirement plan. So if I understand correctly, I should be okay and it won't affect my weekly benefit amount? Do I still need to report it somewhere when I certify?

Oh no, that's exactly what I'm worried about! I really need every penny of my benefits right now. Did you ever try to appeal that decision or get that week's benefits back?

this is totally correct!! my hubby got laid off from salesforce last year and took out his 401k and it didnt effect his unemployment at all. but my cousin got some kind of profit bonus after layoff and they did count that. its all about if its retirement or not

I was in the same boat trying to reach EDD about a similar question last month. Was absolutely impossible to get through until I used Claimyr.com - it automatically navigated the phone system and got me connected to an EDD agent in about 25 minutes. They have a video demo showing how it works here: https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km The agent I spoke with confirmed that 401k distributions don't affect UI benefits. Worth the time saved after days of failed calling!

I've been trying to call for two days with no luck! Just endless busy signals or the dreaded "we're experiencing high call volume" message. I'll check out that service - I'm desperate to get a definitive answer before I process this distribution.

Thank you! I didn't know about the benefit determination guide - I'll definitely look that up. And yes, it is definitely part of the 401k structure. I'm prepared for the tax hit and withdrawal penalty, I just didn't want to lose my unemployment too.

That's a really good point. The HR exit paperwork made it sound like I had to cash out completely, but maybe I misunderstood. I'll double-check if rollover is an option - that would definitely be better tax-wise!

Yes! I finally got through to EDD yesterday. The representative confirmed exactly what you said - since this is a qualified 401k distribution and not ongoing pension payments, it won't affect my weekly benefits. I still need to report it on my taxes of course, but for UI purposes I'm in the clear. Thank you all for the helpful advice!

This thread has been super helpful! I'm actually in a similar situation - got laid off from a startup last week and have some stock options that are about to expire. Reading through all these responses, it sounds like I should definitely get clarification from EDD about how those might be treated differently from retirement distributions. The distinction between qualified retirement plans and other types of compensation seems really important. Thanks everyone for sharing your experiences!

@Chloe Anderson Stock options are definitely a different beast than retirement distributions! From what I understand, when you exercise stock options, EDD typically treats that as income for the week you exercise them, which could affect your benefits. But there might be exceptions depending on when the options were granted and vested. I d'suggest calling EDD with the specific details of your stock option plan - the timing and structure can make a big difference in how they re'treated. Good luck with the job search!

@Chloe Anderson Stock options are definitely treated differently than retirement plan distributions! From what I understand, if you exercise options while unemployed, EDD typically considers that income "for" the week you receive the proceeds, which could impact your benefits for that certification period. The timing of when you exercise versus when the stock was granted matters too. I d'definitely recommend calling EDD before your options expire to get specific guidance on your situation. You might also want to check if your startup s'equity plan has any post-termination exercise periods that could give you more flexibility on timing.

@Chloe Anderson Stock options are definitely a different beast than retirement distributions! From what I understand, when you exercise stock options, the difference between the strike price and market value is typically treated as wages for that period. So unlike the 401k situation that Natalie dealt with, stock options could potentially affect your UI benefits. Definitely get that EDD clarification before your options expire - you don t'want any surprises when you certify for benefits!

@Chloe Anderson Stock options are definitely a different beast than retirement distributions! From what I ve'seen, exercising stock options can sometimes be treated as wages depending on the type ISOs (vs NQSOs and) timing. You ll'definitely want to get specific guidance from EDD on that since the tax treatment and UI implications can be pretty complex. Good luck with your situation - layoffs are tough enough without having to navigate all these benefit questions too!

@Chloe Anderson Stock options are definitely a different beast than retirement distributions! From what I ve'seen, exercising stock options can sometimes be treated as wages depending on the type ISOs (vs NQSOs and) timing. You ll'definitely want to get specific guidance from EDD since the tax treatment and UI implications can vary a lot. The good news is that now you know about services like Claimyr to help you actually get through to someone at EDD without spending days on hold. Good luck with your situation!

@Chloe Anderson Stock options are definitely a different beast than 401k distributions! From what I understand, exercising stock options could potentially be treated as wage income depending on the type ISO (vs NSO and) timing. You ll'definitely want to get specific guidance from EDD on that since the tax treatment and UI implications can be pretty complex. I d'recommend having all your option agreement details ready when you call so they can give you the most accurate answer for your situation.

@Chloe Anderson Stock options are definitely a different animal than retirement distributions! From what I ve'seen, it usually depends on when the options were granted and whether you re'exercising them or just letting them expire. If you exercise them, that could potentially be considered income for the week you do it. I d'definitely recommend calling EDD before making any moves with those options. Also, check if your startup offers any extension programs for laid-off employees - some companies will extend the exercise window so you don t'have to make quick decisions while job hunting.

@Chloe Anderson Stock options are definitely trickier than retirement distributions! From what I ve'seen, it often depends on when the options were granted and whether you re'exercising them or just letting them expire. If you exercise them, the difference between the strike price and current value could be considered income. I d'definitely get that clarified with EDD before making any decisions - especially since you mentioned they re'about to expire. The timing of when you receive any proceeds could matter for your UI certification weeks.

@Chloe Anderson Stock options are definitely a different beast than retirement distributions! From what I ve'seen, it usually depends on whether they re'incentive stock options ISOs (or) non-qualified stock options NQSOs (,)and the timing of when you exercise vs. sell can affect how EDD treats them. ISOs might not count as wages until you actually sell the shares, but NQSOs could be considered income when exercised. Definitely worth getting that EDD clarification like Natalie did - the rules around equity compensation and UI benefits can be pretty complex!