One-time payments (Ira: income, taxes, tuition)

[thegirluptheblock]

Should a 401(k) payout when leaving a firm count as income? Likewise for a tuition reimbursement payment from a company?

I have had both of these payments distributed to me in the past year, and if counted as income they would push me out of my income eligibility bracket for some of the lotteries I've applied to. They are one-time payments so my understanding is that it shouldn't count towards income eligibility, but I've previously had a marketing agent include a 401(k) payout as income in my TIC. Is that correct?

[macnyc2003]

What did you do with the 401(k) money? If you roll it over into an IRA, it won't count for anything at present.

If you don't roll it over, I honestly don't know how the marketing agents would treat it. Plus, next year you will have to pay taxes on the whole amount as regular income.

You can make a strong case that a reimbursement shouldn't count as income.