1. Withdrawals are always taxable. However, withdrawals are not reported on the W-2, only deferrals (contributions). Withdrawals are reported by a 1099-R from the plan administrator. Check online or it should be in the mail soon.
2. Withdrawals can be rolled over into another retirement plan (new employer plan or private IRA) within 60 days, this allows them to continue to grow tax-free. If you don't rollover the funds, they are taxable.
3. Withdrawals are also subject to a 10% penalty unless your spouse was age 55 or older when they separated from service.
4. There are a few exceptions to the 10% penalty but general unemployment is not one of them. The list of exceptions is here.
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-o...
