Will my 401k withdrawal affect my ESD unemployment benefits? Getting conflicting answers

You DO need to report it! I withdrew $5k from my IRA last year and didn't report it initially. Got hit with an overpayment notice 3 months later because ESD somehow found out (probably from tax records). They considered it income for the week I received it and reduced my benefit for just that week. Had to pay back about $700 and went through a whole mess trying to explain I didn't understand the rule. Save yourself the headache and report it NOW before they catch it!

There's actually an important distinction here. ESD treats different retirement-related money differently: 1. Regular pension/retirement PAYMENTS (like monthly distributions) = reportable income 2. One-time withdrawals from YOUR OWN 401k/IRA = generally NOT considered income for UI purposes The key is whether it's a regular payment vs. a one-time withdrawal of your own contributions. This is a common misunderstanding, and some ESD agents even give incorrect information about it. The official ESD handbook states that withdrawal of your own contributions from retirement accounts is NOT deductible income for UI purposes. I would recommend calling ESD directly to get this clarified for your specific situation, though getting through can be challenging.

i went thru this exact thing!! the rules r super confusing. i ended up having to appeal my case and won because one-time withdrawals from your OWN 401k or IRA are NOT counted as income for unemployment. but if its a regular payment or distribution from a pension then yes u have to report it. the ESD website is garbage at explaining this clearly lol

After struggling with this exact question last year, I finally got a definitive answer from an ESD supervisor. Here's the ACTUAL policy: - Lump sum withdrawals from your OWN contributions to retirement accounts (401k, IRA, etc.) are NOT considered deductible income for UI purposes - Regular pension payments ARE deductible income - Employer contributions that you withdraw MAY be deductible The confusion happens because some ESD agents don't understand their own rules. The problem is getting through to someone who knows the correct policy. I spent 3 weeks trying to get someone on the phone who could help. BTW - I finally got through to ESD using Claimyr (claimyr.com). They have a service that basically waits on hold for you then calls you when an agent is about to pick up. They also have a video showing how it works: https://youtu.be/7DieNd3C7zQ?si=26TzE_zGms-DODN3. Saved me hours of frustration and I was able to talk to someone who actually knew the rules about retirement withdrawals.

THEY'RE ALL WRONG!!! ESD absolutely counts 401k withdrawals as income!!! I got AUDITED last year and had to repay THOUSANDS because I listened to bad advice like what people are giving here. If you got money, YOU REPORT IT! Don't mess around with these people, they WILL find out and then you're screwed with penalties and interest!!!!

my brother had this happen. he took money from his 401k and didnt report it. nothing happened for like 6 months then he got a letter saying he had an overpayment. had to pay back 1 week of benefits i think. its really dumb how they treat it like income when its literally YOUR money that you already earned.

Just wanted to follow up on my earlier comment - I called ESD again today to double-check because this conversation made me realize I might have received incorrect information before. The agent confirmed that a one-time withdrawal from my own 401k contributions should NOT have been counted as income for UI purposes. They're now reviewing my case for possible adjustment of the overpayment. So I was given wrong information initially! Sorry for adding to the confusion.

Hi there - I work with a legal aid organization that helps with unemployment issues. Let me clarify this situation: Under Washington state unemployment insurance law, a ONE-TIME withdrawal from your OWN 401k/IRA contributions is NOT considered deductible income for UI purposes. However, there are exceptions: 1. If you're receiving REGULAR retirement payments/distributions, those ARE deductible 2. If you're withdrawing employer-matched funds, those MAY be deductible 3. If you're receiving payments from a pension fund based on previous employment, that IS deductible The reason for the confusion is that ESD's written materials don't clearly distinguish these cases, and unfortunately, not all ESD representatives are properly trained on this distinction. If you've made a one-time withdrawal of your own contributions, you technically don't need to report it. However, I always advise clients to call ESD and get the answer documented (ask for the agent's name and ID number, and note the date/time of the call).

I'm dealing with something similar right now - took out about $6k from my 401k last month for car repairs after losing my job. Been going back and forth on whether to report it too. Reading through all these responses, it sounds like the key thing is making sure it was YOUR contributions vs employer matching funds. I'm pretty sure mine was all my own money since I only worked at that company for 8 months before getting laid off. Still planning to call ESD to be 100% sure though - this stuff is way too confusing to guess on! Thanks everyone for sharing your experiences, really helps to know I'm not the only one confused by this.