How to Report a TSP Distribution for Taxes

You can use Form 1040 to report your TSP distributions.
Image Credit: Comstock/Comstock/Getty Images

Usually, thrift savings plans, or TSPs, shouldn't be withdrawn until you reach retirement because of the early withdrawal penalties that apply if you're under 59 1/2 years old. However, if you're starting a business and need funds, you might take a distribution from your TSP just to make ends meet. Taking a TSP distribution because of business expenses doesn't qualify for an exemption, so you'll have to pay an extra 10 percent penalty on the taxable portion of the distribution.


Step 1

Report the taxable portion of the TSP distribution on line 16b of Form 1040. The taxable portion of the distribution is reported in box 2a of Form 1099-R. This amount adds to your taxable income for the year.

Video of the Day

Step 2

Report the entire TSP distribution as a non-taxable pension and annuity distribution on line 16a of Form 1040 if any of the distribution is non-taxable. The total amount of your TSP distribution is found in box 1 of your Form 1099-R. If all of the distribution is taxable, do not report any amount on line 16a.


Step 3

Include any federal income tax withholding, found in box 4 of your Form 1099-R, in your income taxes withheld on line 62 of Form 1040.


Step 4

Complete Form 5329 to figure your early withdrawal penalty if you are under 59 1/2 years old when you take the distribution. For example, if you are 40 and $6,000 of your distribution is taxable, you'll owe a $600 penalty. Report the penalty you owe on line 58 of Form 1040.

Things You'll Need

  • IRS Form 1099-R

  • IRS Form 1040

  • IRS Form 5329

Video of the Day



Report an Issue

screenshot of the current page

Screenshot loading...