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mnmailman  
#1 Posted : Thursday, January 05, 2017 1:42:16 PM(UTC)
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Any recent retirees via FERS and traditional TSP account; since your TSP is taxed when you withdraw it, how does this work via a monthly payment choice ?

I.e., if you were going to get an X dollars a month payment via your traditional TSP account, is it taxed *as* it's withdrawn, or just in April as part of that years income ?

Same question for the FERS annuity.

Thanks !
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Guts  
#2 Posted : Thursday, January 05, 2017 2:14:08 PM(UTC)

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Yes, it is taxed, based on a selection rate when you fill out the monthly full withdraw for TSP-78.

BTW, no state tax is withheld. You will probably have to do 'estimated' state tax payments, if applicable.

https://www.tsp.gov/PDF/formspubs/tsp-780.pdf

Also, you can adjust the tax holding amount as many times as you want, until you get it right.
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mnmailman  
#3 Posted : Thursday, January 05, 2017 2:33:14 PM(UTC)
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Originally Posted by: Guts Go to Quoted Post

Yes, it is taxed, based on a selection rate when you fill out the monthly full withdraw for TSP-78.

BTW, no state tax is withheld. You will probably have to do 'estimated' state tax payments, if applicable.

https://www.tsp.gov/PDF/formspubs/tsp-780.pdf

Also, you can adjust the tax holding amount as many times as you want, until you get it right.


Thanks for the link, was just looking at that form.

So to be clear, it is taxed *as* it's withdrawn, not just at tax time ?
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Guts  
#4 Posted : Thursday, January 05, 2017 6:00:35 PM(UTC)

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Originally Posted by: mnmailman Go to Quoted Post
Originally Posted by: Guts Go to Quoted Post

Yes, it is taxed, based on a selection rate when you fill out the monthly full withdraw for TSP-78.

BTW, no state tax is withheld. You will probably have to do 'estimated' state tax payments, if applicable.

https://www.tsp.gov/PDF/formspubs/tsp-780.pdf

Also, you can adjust the tax holding amount as many times as you want, until you get it right.


Thanks for the link, was just looking at that form.

So to be clear, it is taxed *as* it's withdrawn, not just at tax time ?




Correct, taxed when withdrawn.
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mnmailman on 1/5/2017(UTC)
mnmailman  
#5 Posted : Thursday, January 05, 2017 6:39:16 PM(UTC)
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Originally Posted by: Guts Go to Quoted Post
Originally Posted by: mnmailman Go to Quoted Post
Originally Posted by: Guts Go to Quoted Post

Yes, it is taxed, based on a selection rate when you fill out the monthly full withdraw for TSP-78.

BTW, no state tax is withheld. You will probably have to do 'estimated' state tax payments, if applicable.

https://www.tsp.gov/PDF/formspubs/tsp-780.pdf

Also, you can adjust the tax holding amount as many times as you want, until you get it right.


Thanks for the link, was just looking at that form.

So to be clear, it is taxed *as* it's withdrawn, not just at tax time ?




Correct, taxed when withdrawn.


Really appreciate the help.

Edited by user Thursday, January 05, 2017 6:39:52 PM(UTC)  | Reason: Not specified

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dandare75  
#6 Posted : Friday, January 06, 2017 10:26:24 AM(UTC)
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More to it. Not all states tax TSP. New York does not tax TSP. It is considered part of your FERS pension therefore not taxable by New York. All states differ.
thanks 1 user thanked dandare75 for this useful post.
mnmailman on 1/6/2017(UTC)
mnmailman  
#7 Posted : Friday, January 06, 2017 2:13:20 PM(UTC)
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Originally Posted by: dandare75 Go to Quoted Post
More to it. Not all states tax TSP. New York does not tax TSP. It is considered part of your FERS pension therefore not taxable by New York. All states differ.


Didn't know that, thanks.
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Guts  
#8 Posted : Friday, January 06, 2017 3:33:47 PM(UTC)

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Quote:
BTW, no state tax is withheld. You will probably have to do 'estimated' state tax payments, if applicable.


https://www.retirementliving.com/taxes-by-state

Edited by user Friday, January 13, 2017 9:37:18 PM(UTC)  | Reason: Not specified

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EagleDog  
#9 Posted : Sunday, January 15, 2017 11:52:38 AM(UTC)

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Originally Posted by: dandare75 Go to Quoted Post
New York does not tax TSP. It is considered part of your FERS pension therefore not taxable by New York.


New York does tax TSP if you are under 59 1/2 years of age.

dandare75  
#10 Posted : Monday, January 16, 2017 8:03:02 AM(UTC)
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Originally Posted by: EagleDog Go to Quoted Post
Originally Posted by: dandare75 Go to Quoted Post
New York does not tax TSP. It is considered part of your FERS pension therefore not taxable by New York.


New York does tax TSP if you are under 59 1/2 years of age.



No, it does not. Review various NY Tax advisory opinions on this matter. It you are retired CSRS employee with a TSP account under 59 1/2 you will be taxed. TSP is considered part of your FERS pension and NY does not tax government pensions. Hope you haven't been paying state tax on TSP this whole time.
dandare75  
#11 Posted : Monday, January 16, 2017 8:13:42 AM(UTC)
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Please read NY State Pub 36, TSB-A-94(1)I, and TSB-A-15(6)I. All of these clearly state TSP withdrawals for FERS employees are not taxable by NY state. Maybe you need to file an amended NY tax return and get a refund.

Edited by user Monday, January 16, 2017 4:19:18 PM(UTC)  | Reason: Not specified

dandare75  
#12 Posted : Monday, January 16, 2017 4:18:51 PM(UTC)
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Originally Posted by: dandare75 Go to Quoted Post
Please read NY State Pub 36, TSB-A-94(1)I, and TSB-A-15(6)I. All of these clearly state TSP withdrawals for FERS employees are not taxable by NY state. Maybe you need to file an amended NY tax return and get a refund. Hopefully you are not a Tax preparer!


Forgot to include TSB-A-01(1)I. This TSB actually explains the tax exempt status of the TSP for NY State residents who are in FERS better than the original opinion (TSB-A-94(1)I.
postalvet  
#13 Posted : Monday, January 16, 2017 5:44:34 PM(UTC)
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Postal employee (retired) 38 yrs who helps even if some do not believe me! I was a Steward, officer & trouble maker. Just Sayin'
dandare75  
#14 Posted : Tuesday, January 17, 2017 4:52:34 AM(UTC)
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Originally Posted by: postalvet Go to Quoted Post
https://www.tax.ny.gov/pdf/advisory_opinions/income/a94_1i.pdf


Thank you postalvet. I am embarrassed to admit after all this time and the number of posts I have made here, I still do not know how to set up a link.
NotSure1962  
#15 Posted : Wednesday, January 25, 2017 6:06:58 AM(UTC)
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Hmm....after reading I am still fuzzy. My situation.....Retiring at 55 in Arkansas CSRS. I plan on requesting 1000 per month from my TSP. Will I need to plan on paying state income tax on that $1000? Some of the thing read seem to indicate that the first $6000 is exempt.
GordonG  
#16 Posted : Thursday, January 26, 2017 5:48:55 AM(UTC)

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Originally Posted by: NotSure1962 Go to Quoted Post
Hmm....after reading I am still fuzzy. My situation.....Retiring at 55 in Arkansas CSRS. I plan on requesting 1000 per month from my TSP. Will I need to plan on paying state income tax on that $1000? Some of the thing read seem to indicate that the first $6000 is exempt.


If I may...in what year did your federal civilian service begin? Are you turning 55 this year?

"Fear, not clemency, restrains the wicked."


"Everyone has a plan 'till they get punched in the mouth." Mike Tyson
NotSure1962  
#17 Posted : Thursday, January 26, 2017 5:51:57 AM(UTC)
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Originally Posted by: GordonG Go to Quoted Post
Originally Posted by: NotSure1962 Go to Quoted Post
Hmm....after reading I am still fuzzy. My situation.....Retiring at 55 in Arkansas CSRS. I plan on requesting 1000 per month from my TSP. Will I need to plan on paying state income tax on that $1000? Some of the thing read seem to indicate that the first $6000 is exempt.


If I may...in what year did your federal civilian service begin? Are you turning 55 this year?



1983 and yes I turn 55 on October 5 and plan on retiring on November 1.

Guts  
#18 Posted : Thursday, January 26, 2017 5:48:48 PM(UTC)

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ARKANSAS Department of Finance and Regulation

26-51-307 RETIREMENT PLANS AND DISABILITY BENEFITS
1.26-51-307 Retirement or Disability Benefits

The first $6,000.00 of retirement or disability benefits received by a resident of Arkansas from an in-state or out-of-state retirement plan or program will be exempt from Arkansas income tax if: a) the retirement plan or program is directly related to either public or private employment; b) the Arkansas resident is the employee or former employee owner of the plan or the employee or former employee's spouse.


Income Tax Regulations
Page 28

Plans or programs that could fall within the scope
of this exemption are:
pension plans ; profit sharing plans; stock bonus plans; employee stock ownership plans (ESOPs); annuity plans; thrift and savings plans; cash or deferred arrangements (CODAs, also known as 401(k) plans); and simplified employee pension (SEP) plans. An individual retirement account (IRA) will fall outside the scope of this exemption unless it is established by an employer as a SEP.

Your CSRS annuity will use up all of this allowance.

Edited by user Thursday, January 26, 2017 5:56:33 PM(UTC)  | Reason: Not specified

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NotSure1962  
#19 Posted : Thursday, January 26, 2017 5:57:49 PM(UTC)
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Originally Posted by: Guts Go to Quoted Post
ARKANSAS Department of Finance and Regulation

26-51-307 RETIREMENT PLANS AND DISABILITY BENEFITS
1.26-51-307 Retirement or Disability Benefits

The first $6,000.00 of retirement or disability benefits received by a resident of Arkansas from an in-state or out-of-state retirement plan or program will be exempt from Arkansas income tax if: a) the retirement plan or program is directly related to either public or private employment; b) the Arkansas resident is the employee or former employee owner of the plan or the employee or former employee's spouse.


Income Tax Regulations
Page 28

Plans or programs that could fall within the scope
of this exemption are:
pension plans ; profit sharing plans; stock bonus plans; employee stock ownership plans (ESOPs); annuity plans; thrift and savings plans; cash or deferred arrangements (CODAs, also known as 401(k) plans); and simplified employee pension (SEP) plans. An individual retirement account (IRA) will fall outside the scope of this exemption unless it is established by an employer as a SEP.

Your CSRS annuity will use up all of this allowance.


I was afraid of that :) Thanks a million for helping me!

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