Thrift Savings Plan (TSP)
Annual TSP Participant Statements for 2021: On Feb. 3, the TSP announced that annual 2021 participant statements covering the period from January 1 through December 31, 2021 are now available in the My Account section of www.tsp.gov and have also been mailed.
The TSP recommends all participants review the statements thoroughly to identify any errors or unauthorized activity, and to ensure they are on track to meet retirement savings goals.
Below are a few important terms — with definitions — provided by the TSP that participants may see when reviewing their statements:
Adjustments—The net amount of reversals of certain transactions.
Excess Deferrals—A contribution that exceeds the elective deferral limit in a particular year.
Forfeitures—FERS and BRS employees who leave federal service before they are vested in the TSP forfeit the Agency/Service Automatic (1%) Contributions and earnings on those contributions. If a forfeiture occurs because of agency payroll error, the affected participant is entitled to have those forfeited funds restored to his or her TSP account.
In-Service Withdrawals—If you’re an active federal employee or a member of the uniformed services, you can make two types of in-service withdrawals from your TSP account: financial hardship and age-based. Read more about making In-Service Withdrawals.
Loan Disbursements—An amount removed proportionally from any traditional (non-Roth) and Roth balances in your account. Similarly, if you are a uniformed services member with tax-exempt contributions in your traditional balance, your loan will contain a proportional amount of tax-exempt contributions as well. If your TSP account is invested in more than one fund, your loan is deducted proportionally from the employee contributions (and earnings on those contributions) that you have in each fund.
Redesignations—Contributions that have been removed from your traditional balance and put in your Roth balance, and vice versa, to correct agency or service contribution submission errors.
Required Minimum Distributions (RMDs)—The Internal Revenue Code (IRC) requires that you receive a portion of your TSP account beginning in the calendar year when you become age 72 and are separated from service. The portion is called a Required Minimum Distribution (RMD). Learn more about RMDs.
Transfers/Rollovers—Money coming into your TSP account from an eligible retirement plan, or from a TSP-to-TSP transfer when you combine uniformed services and civilian TSP accounts. Transfers out of the TSP would be shown as “Post-Separation” or “In-Service” withdrawals.
Vesting—Being “vested” means you’re entitled to keep all of the money in your account. Vesting only applies to Agency/Service Automatic (1%) Contributions (and their earnings) and occurs after you work in the federal government or uniformed services for a certain number of years. Read more about vesting.
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IRS Form 1099-R for the TSP
The TSP announced Jan. 24 that it has mailed IRS Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to participants who received a withdrawal up to December 29, 2021, and/or a taxable distribution of a loan up to December 31, 2021. (Withdrawals processed on December 30 and 31 are taxable income for 2022.)
If participants have not received the 2021 Form 1099-R by mid-February, they can print a copy from the My Account section of TSP.gov. Corrected Forms 1099-R will be issued late February/early March. Participants who are expecting a corrected Form 1099-R may wish to wait to file their income taxes until they receive the form.
2021 1099-R Tax Forms for CSRS and FERS annuitants
The Office of Personnel Management (OPM) will mail 1099-R forms for 2021 by January 31. Depending on where the annuitant lives, mailed 1099-R tax forms may not be received until mid-February.
An annuitant with a Retirement Services Online (RSO) account under OPM can access the 2021 1099-R online. Go to: https://www.servicesonline.opm.gov/
While in Services Online, annuitants are urged to make sure OPM has their correct mailing and email addresses to ensure receipt of future correspondence. And after filing income taxes for the previous year, annuitants can return to Services Online to tweak their tax withholding for the current year if necessary.