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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I.e., if you were going to get an X dollars a month payment via your traditional TSP account, is it taxed *as* it's withdrawn, or just in April as part of that years income ?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So to be clear, it is taxed *as* it's withdrawn, not just at tax time ?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So to be clear, it is taxed *as* it's withdrawn, not just at tax time ?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.
A body of men holding themselves accountable to nobody ought not to be trusted by anybody." --Thomas Paine
thanks 1 user thanked for this useful post.
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.
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