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I've recently been laid off as part of a large downsizing of an IT company. This is the first time I've been unemployed since graduating from college, and I'm still in shock.
I've never had to file unemployment before, so I'd appreciate any information you guys can give me on it. Also, does it make a tax difference when you file for unemployment and when you rollover a 401K? Should one be done before the other? How does it affect severance pay? If it makes a difference, I'd be filing in Illinois. Thanks for any help.

Sorry that you've joined the flood of downsized. The shock is very real, and can lead to severe depression, so do your best to stay positive, keep busy, and do some fun things to improve your spirits.

Based on my last bout with unemployment ten years ago, I don't see any tax implications affecting when to file or when to move your 401K. Unemployment compensation is taxable to the feds, but may not be taxable to the state, depending on your state's rules. In moving your 401K be sure to make it a trustee to trustee (or whatever the appropriate term is), and don't have anything paid directly to you. That will avoid any tax concerns.

Good luck!

Karl in CA

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