TSP New York State

Submitted by raymond kregor on Mon, 2013-02-25 00:07

I read that a FULL withdrawal at retirement from a TSP cannot use the $20000 NYS exemption. Only periodic TSP withdrawals are entitled to this treatment. I also read that a full or partial IRA withdrawal does qualify for the exemption. When I retire can I rollover the TSP into the IRA and than take a withdrawal from the IRA and use the $20000 exclusion?



Submitted by Alan - IRA critic on Mon, 2013-02-25 17:27

  • NYS Pub 36, p 9 bears that out:   http://www.tax.ny.gov/pdf/publications/income/pub36.pdf
  • If you want to maintain the TSP after retirement, if the plan allows you could take out withdrawals using installments and it would be eligible for the exclusion. Just avoid the 1099R box 2b showing “Total distribution”. If you go this way, and eventually do an IRA rollover, do the rollover right after the first of the year so any installment payments will not be included in the 1099R showing a total distribution.
  • You can also do a direct rollover to an IRA, take IRA distributions and exclude them up to 20,000. and avoid the above technicalities. Depends on how bad you want to have access to the low TSP expense ratios.

 

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