Thrift Savings Plan (TSP) and Taxes

How are Thrift Savings Plan (TSP) excess deferrals treated for tax purposes?  If Thrift Savings Plan excess deferrals are made then those deferrals are treated as income in the year the contributions are made.  The excess TSP deferrals are treated as income whether they are refunded to the employee or not.  Deferred income is reported on an employee’s W-2.

Traditional excess deferrals to your TSP.gov account must be reported on the employee’s individual tax return as taxable income for the year in which excess deferrals were made.  TSP Roth excess deferrals are also treated as taxable income in the year the excess deferrals were made.

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Excess TSP deferrals that are taken as a refund from the TSP are reported on IRS Form 1099-R (distribution from annuities, pensions, insurance contracts, retirement and profit-sharing plans and IRAs).

Check with you tax advisor, financial planner or educator during the course of the year to make certain you are making sound decisions about managing your TSP and your taxes well.

……..Also take full advantage of the many resources available to you in your Human Resources Office (Postal Employees can use PostalEase and LiteBlue) to help you make plans to retire well.

P. S.  Always Remember to Share What you Know.