Thread regarding Chevron Corp. layoffs

@Nohi, I wouldn't delay taking Texas unemployment benefits. Start taking your $479/wk benefits now. You may not want to work anymore, but to get your benefits, you'll need to make at least 3 job searches per week. Apply online at the TWC website. Don't go into a local field office. Select on your application to receive communication by email or US Mail, not by phone. You will be asked to provide them your job search log for a random one or two week period sometime into your 3rd or 4th month of benefits. I provided them a bogus log with 6 company names and contacts. I never heard from them because I knew they wouldn't audit it completely. I submitted the job log stating I mailed my resume and cover letter directly to the posting company's HR department (no contact name). You can receive TWC benefits for a maximum of 6 months.

Pardon me for reviving this topic but I applied for unemployment last week and saw that I have a benefit year through half of June 2017. But the maximum unemployment benefit is for 26 weeks. So does that mean I can delay taking my benefits into 2017 for the lower taxes? I was thinking of putting in for the $479 every other week. I am now in early retirement and really not wanting to find a new job.

Does taking out a Lump Sum Pension payment (directly deposited to a 401-K) negate one's ability to get Texas Unemployment?

OP here. That was my first post on this site and I really appreciate the genuine responses. Refreshing not to get the a-hole responses we frequently read on other posts. I don't think I'll be able to avoid max tax on it but it will offset other taxes. I will still do some calcs though. Thanks again for all your discussion.

File immediately. You are supposed to be actively looking for a job while on unemployment. keep up with the paperwork on job searches. I got a letter from TWC asking about my job searches. Minimum of 2-3 per week needed. If you get retirement you can't get unemployment. Company reports those things.

@1rte - I think OP's strategy of waiting till next year makes a lot of sense. He'll pay less taxes in the long run. Remember that Texas will be only contributing $8000 to his taxes on his $300K and $4000 to pay Federal income tax on the unemployment insurance. If he files next year he may be able to keep a lot more or all of the $12000.

If the OP is facing $300,000 in taxable income for 2016, he can start unemployment asap and stay on it for as long as possible with the mindset that the benefits will serve to pay for some of his Federal taxes. He can have a beer at tax time knowing that the State of Texas contributed $12,454 in his name. Sweet, right?

Yes, Unemployment Insurance benefits is income and is taxable. You can have them take it out or not. if they take it out it is something like a flat 10%. There is no big deal to it. If you don't get Income tax with-held, you just account for it when you file your taxes, you will either owe, or get a return, depending on all of the factors. With your income in that year,($300k), you should probably have them with-hold the taxes. However, it's only a matter of pay now or pay later.

@azs - Unfortunately since OP estimates his income this year including severance will be 300K and he was covered by Chevron retirement plan for part of the year, I don't think any contribution to an IRA would be deductible this tax year. However, I would recommend that he increase his 401K as much as possible until leaves the company if he hasn't done so already.

@qua, sorry I missed the OP's point of delaying for tax reasons. In that case, a delay can be used as a tax strategy. But, first be sure to check the TWC rules for applying for benefits. I'd hate to see anyone lose out on getting unemployment benefits altogether. In any case, if you still intend to look for work, don't delay at all. Start collecting unemployment asap. If the income from unemployment kicks up your marginal tax rate, consider if you are able to contribute some or all of it to an IRA (for you or spouse). That contribution is tax deductible and will lower your federal income taxes when filing your 1040.

@bka - I think you missed the point. The OP would like to delay filing until next year when his income will be lower so that he will have a lower marginal tax rate on the unemployment payments. This is probably a smart strategy, assuming you're sure you won't get a job in the interim (e.g. you're actually retiring). He is not delaying to increase his payments. I agree that he will certainly hit the ceiling even with one quarter that where he had no earning, especially given that he estimates his total earnings + severance for this year as 300K. However, you can't delay filing indefinitely because eventually all your earning will be too old to count. But if he waits until January he should be fine.

@lmv, you are absolutely correct in how the TWC calculates the paid benefit. However, consider the maximum weekly benefit is $479 (this year). I guarantee you will qualify for the maximum already. There's no need to delay waiting an extra quarter to increase your average earnings. With the salaries Chevron pays, even an Office Assitant will qualify for the maximum. Not convinced? Go on out to the TWC website and run the calculation yourself. Just have your pay information at hand to input into the calculation template.

With regard to delaying filing: They use your wages in the quarters before you file to determine eligibility. However, they go back a full year and quarter and don't count the immediately preceding quarter, so your delaying might not hurt you. See Base Period section of http://www.twc.state.tx.us/jobseekers/eligibility-benefit-amounts on how they determine your base period. The fact that you had no income in July, August, September may effect the amount of your payment or you may max out anyway, you'll have to do the calculation yourself. At least that's my understanding of the process.

I filed for unemployment benefits through the TWC in Texas last year. You can file on Day 1 that you are officially terminated. You are not obligated to withhold any taxes. It's your choice when you sign up. I chose not to have taxes withheld, as I had calculated my severance was going to be hit for 25% tax withholdings, putting me over the top for the total annual Federal taxes to pay on my 1040 tax return.

Unemployment benefits are taxable income reportable to the Internal Revenue Service (IRS) under federal law. You must report all unemployment benefits you receive to the IRS on your federal tax return.

http://www.twc.state.tx.us/jobseekers/federal-income-taxes-your-unemployment-benefits

There is usually no Federal Income tax withholding, however, in states with a state income tax, there will be a state income tax withholding.

http://www.fool.com/retirement/general/2016/01/30/do-i-have-to-pay-tax-on-unemployment-benefits.aspx

I would advise to file for unemployment AFTER you have received your paid vacation (should be the first check after June 13th) and AFTER you received your severance check.

Filing later will push out the benefit.

NOTE: In Texas your weekly benefit amount (WBA) will be between $65 and $479 (minimum and maximum weekly benefit amounts) depending on your past wages.

http://www.twc.state.tx.us/jobseekers/eligibility-benefit-amounts