The Thrift Savings Plan, or TSP, offers government workers an opportunity to prepare for their retirements by saving throughout their federal careers. Once you begin withdrawing the funds from the plan, some of the distribution received may be considered income and taxed as such. In order to be fully compliant with federal tax law, you have to report any distributions received from your TSP on your federal income tax form. While there’s no specific line labeled "TSP" on the tax form, there’s still a specific placement and method for reporting not only the distribution as a whole, but the taxable portion, as well.
Things You'll Need
- Form 1099-R
- Tax return form
Locate your TSP distribution payment on the Form 1099-R sent to you from the Thrift Savings Plan program. The payment is listed by the payer’s name, and includes both a gross distribution amount and a taxable amount.
Report the amount listed under gross distribution on the 1099-R as “Pension and Annuities,” under the income section of your individual income tax return.
Report the amount under "Taxable Amount," next to the distribution amount under the income section of your tax return form. On the 2010 Form 1040, this is on line 16.