Is my untouched 401k considered income for PA UC benefits while filing 2023 taxes?

No worries - your 401k that you haven't touched won't affect your PA UC benefits at all. I went through this exact situation last year. As long as you haven't withdrawn any money from it, it's not considered income for unemployment purposes. Only actual distributions (money you take out) would count as income. You're good to leave it where it is until you decide what to do with it in April 2025. BTW, if you're having trouble getting through to UC to confirm this or have other tax questions, I used Claimyr (claimyr.com) to reach an actual person at PA UC after trying for days with busy signals. They have a video showing how it works: https://youtu.be/CEPETxZdo9E?si=WL1ZzVZWG3KiHrg2. Saved me hours of redial frustration!

Not true!! My cousin had a 401k and it DID affect his unemployment!!! UC is tricky about these things so be careful!!

I just went through this with my PA unemployment claim. Your untouched 401k doesn't affect your benefits at all. The 401k only appears on your W-2 to show contributions that were made during your employment, which is totally separate from UC calculations. What WOULD affect your benefits is if you start taking distributions (withdrawing money) from the 401k while on unemployment. Those withdrawals would need to be reported as income on your bi-weekly claims and could reduce your weekly benefit amount depending on how much you take out. Also, when you hit that April 1st decision date, be careful about what you do with the 401k. Rolling it into another qualified retirement account (like an IRA) won't affect your benefits. But cashing it out would be reported as income.

i had this same question! my accountant told me that retirement accounts are only income when u take money out so ur good

Just to add some technical clarification: According to PA UC regulations, deferred compensation like 401k plans are not considered income for unemployment purposes unless you take a distribution. The contributions shown on your W-2 were already accounted for in your base year wage calculations when your initial benefit rate was determined. However, there is one scenario to be aware of: if your former employer made any severance payments directly to your 401k when you were laid off, that portion might need special handling on your taxes. It wouldn't affect your UC benefits, but it could impact your tax situation. For your April 2025 decision - you generally have three options: 1. Leave it with former employer (if they allow it) 2. Roll it over to an IRA or new employer's plan (no tax impact) 3. Cash out (will count as income for both taxes and UC, plus penalties if under 59½

@MattistheMan07 - Good point about Roth accounts. Yes, there are different tax implications for Roth 401ks vs traditional 401ks, but for PA UC purposes, the distinction doesn't matter unless you actually withdraw funds. For a traditional 401k, withdrawals are fully taxable and count as income. For a Roth 401k, only the earnings portion of withdrawals might count as income if certain conditions aren't met. But again, if the account is just sitting there untouched, neither type impacts unemployment benefits.

Thank you all sooo much for the help!! This community is amazing. I'm gonna leave my 401k right where it is until April 2025 and then probably just roll it over. One less thing to worry about while dealing with PA unemployment!

Great question! I went through something similar when I was laid off from my manufacturing job last year. Your untouched 401k definitely won't affect your PA UC benefits - I was worried about the same thing and called UC to confirm. Just want to add one thing that helped me: when you do your taxes, make sure you're only reporting actual income you received, not the balance of retirement accounts. The W-2 shows your 401k contributions from when you were working, but that's already been factored into your unemployment calculation. Also, since you mentioned construction work - if you end up finding seasonal work before your April decision date, just remember that any 401k from a new employer would be separate from your current one. Good luck with everything!

Does anybody know for taxable brokerage accounts? i have investments and some that earn dividends. i reinvest everything. I have not sold or withdrawn any money from the account.