If I cash in my 401k do I have to log that as earned income on my weekly unemployment filing in Arizona. I had no choice since $160 per week does not pay my bills. I used it to pay off my car and a credit card to alleviate the financial load.
It depends on your state's unemployment rules. But it appears that AZ will reduce your employment benefits if you take out money from your 401(k). The advice in the link is to wait until you have exhausted all of your benefits before drawing on your 401(k).
However, given the financial hardship you are under, it may make financial sense to clear out sources of high interest debt such as a credit card or car as these could outweigh any benefit you may gain by paying the minimum credit card payment, and pushing back on auto loan payments. It would also give you some peace of mind.
As the benefits vary based on the amount of your 401(k) withdraw, it is important that you keep the withdraw to the minimum.