In California, getting a 401K disbursement will not affect unemployment for two reasons. One is that if the employee contributed in any way then the 401K disbursement amount cannot be used in any formula to reduce the weekly benefit or disqualify claimant from unemployment. In other words the employer must have contributed one hundred percent.

The second reason is that a lump sum amount from a retirement plan could not be used to disqualify or reduce the unemployment benefit. It would have to be some sort of periodic amount the claimant was already receiving perhaps from a previous company they worked for.

There will be a tax penalty of ten percent for anyone withdrawing before age fifty-nine and a half years of age. This is in addition to the normal retirement income tax from withdrawing the 401K. Also, the unemployment compensation itself will be taxed.