Federal Income Taxes

 

In general, TSP withdrawal payments are subject to Federal income tax. However, different tax rules apply to the different withdrawal options, as well as to the type of money (traditional or Roth) that is included in your payment. Also, different tax rules may apply to Federal civilian employees and to members of the uniformed services. You may also be subject to state taxes.


Early Withdrawal Penalty Tax

 

Depending on your age when you leave Federal service as well as your withdrawal option and its timing, you may be subject to the IRS 10% early withdrawal penalty tax on the taxable portion of your withdrawal.


For detailed information about the tax rules that apply to withdrawals taken after leaving Federal service, you should read the TSP tax notice "Important Tax Information About Payments From Your TSP Account" and consult with your tax advisor.