TSP Withdrawal Taxation Treatment – New York State
Is the TSP New York State Taxable or Exculable?
Retired Federal Law Enforcement. Retired before 59 1/2 (mandatory retirement is 57). Understood that Federal Pension (FERS) is NYS Tax Exempt however; unclear on TSP Withdrawals. Note that withdrawals are being made at lifetime expectancy and NOT subject to 10% early withdrawal penalty for FED TAX.
NYS is as clear as mud as to handling of TSP Withdrawals of Public Service Officer (PSO)/Law Enforcement retiree taking TSP Withdrawals at Lifetime Expectancy rate before 59 1/2. Is it tax exempt because considered part of federal pension?? Does it have the 20K limit exclusion? Does it matter that recipient is retired law enforcement officer/PSO?? Does age matter here? Will this change when TSP recipient is over 59 1/2?
I’ve read NYS Law 612 several times and still don’t understand.
Any assistance would be greatly appreciated.
Permalink Submitted by Alan - IRA critic on Wed, 2022-03-09 04:15
The TSP is federal pension plan and fully exempt from NYS tax. Following is the advisory opinion:
TSB-A-15(6)I:7/15:Petition No. I140527B,tsba156i (ny.gov)
Permalink Submitted by Brian Traller on Wed, 2022-03-09 14:53
Alan, thanks for getting this answered!! Much appreciated! I hope this stays up on the forum, as it’s very confusing!!