The IRS is reaching out to assist unemployed workers.
The new IRS Publication 4128 covers the basics on common tax issues, such as retirement plan payouts, unemployment compensation, severance pay and deducting job hunting expenses.
But there is a problem tapping an IRA for living expenses. You may opt out of income tax withholding, that may not be a good idea because withdrawals from deductible IRAs are fully taxable and, if you aren’t age 59½, you owe a 10% penalty. Withholding helps you avoid a huge tax bill come next April.
There may be the possibility of a Section 72T of taking 5 years of systematic payments if over 55 years old without a penalty.