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If I had to close out a mandated county retirement account do I have to report this to Texas unemployment as income?

by Anonymous
(Texas)

I was working until Jan 1, 2009 with a private firm when I was laid off. I have met unemployment requirements and have been receiving benefits. To date I am temporarily employed with the Census and have reported hours and wages as required.


From 2007-2008 I worked for Dallas County and was part of a RIF and went into the job above. I had a small mandatory Texas County & district retirement system, TCDRS,account from the percentage of my salary deducted.

Now my daughter is graduating and going on to school. The Retirement account is under 5000.00 and I checked with the IRS about the taxes required.

My daughter is graduating and going on to school. Unemployment will not cover expenses. On the benefits requirements it asks if I received a distribution from a retirement account or a pension fund. Is closing out this account considered a distribution by unemployment? It was my salary that was deducted.

Thank you,
Cyndi


Hi Cyndi,

Good question.

Anytime I get a question about whether other money is considered reportable as far as unemployment benefits goes, I head right on over to this page at the United States Dept. of Labor. I click the current year and then I go to the "Non-Monetary Eligibility" chartbook.

Beginning on page 34 it specifically addresses your issue on a state by state basis.

Your particular situation of whether cashing out a retirement plan will affect unemployment benefits is found in Table 5-16 on page 39.

The answer is yes, because your employment with Dallas County is likely a base period employer if you filed for unemployment in the first quarter of 2009. Your base period should be 10/1/07 - 9/30/08.

Texas does not have a provision for excluding pensions from non base period employers, but nor do they have one that includes all pensions. So, I think it would be a good idea to get clarification from the state on this point.

They do take into account your contributions though, so it may only be what the employer contributed that has an effect.

I can't be more specific about this element of how they may figure it out .. so I suggest you also ask the state for an explanation on this point as well.

Chris

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