#TSP 1099 R CODE#

In this case, qualifying individuals would have to establish their eligibility for the exemption by filing IRS Form 5329 directly with the IRS. If agencies do not identify public safety employees by sending the “P” code, the 1099-R will not reflect an exemption to the early withdrawal penalty.

#TSP 1099 R CODE#

If an agency determines that an employee who separated with an “S” (Separated) code before the creation of the “P” code qualifies as a public safety employee, the agency may resubmit an EDR for that employee with the appropriate “P” code. Therefore, 1099-Rs mailed beginning in 2017 for the 2016 tax year will be the first to reflect the exemption. The law applies to withdrawals from the TSP paid after December 31, 2015. In January of the year following the distribution, the TSP will issue a 1099-R that accurately reflects a qualifying public safety employee’s exemption from the early withdrawal penalty. When the separated participant requests a withdrawal, the TSP system will use the “P” Employment Code, Employment Code Date, and Date of Birth to determine whether the participant is eligible for an exemption to the early withdrawal penalty. Agencies should submit the “P” code regardless of the employee’s age. You may have already received the 1099-R. When a public safety employee separates from federal service, the servicing payroll office must submit an Employee (06) Data Record (EDR) containing the new “P” Employment Code and the appropriate Employment Code Date corresponding to the date of separation. 1099-Rs for repaid 2020 RMDs are correct If you received a required minimum distribution (RMD) from your TSP account in 2020, we must report the income and send you a Form 1099-R even if you rolled the money back into your account or into another retirement account under the terms of the CARES Act. The new separation code will appear in the DSUB Employment Code menu as “P-Separated-PSEE.” See the end of this bulletin for a complete list of TSP Employment Codes. To facilitate this identification, the TSP has created a new Employment Code for public safety employees: “P.” Until the agencies can modify their systems to allow the submission of the new Employment Code, payroll offices can use the Data Submission and Report Retrieval Application (DSUB) to identify public safety employees. Therefore, the TSP will treat as eligible for the exemption only those participants who are (1) identified by their employing agencies as public safety employees and (2) determined by the TSP to have separated during or after the year they turn 50. The TSP does not have the necessary information to make that determination. It is the responsibility of individual employing agencies to determine whether an individual is a public safety employee. This change is effective for withdrawals from the TSP paid after December 31, 2015.

This bill amends the Internal Revenue Code to allow specified federal law enforcement officers, customs and border protection officers, federal firefighters, and air traffic controllers (“public safety employees”) who separate from service during or after the year they turn age 50 to make a withdrawal from the TSP without incurring a 10% early withdrawal penalty. Public Law 114-26, the Defending Public Safety Employees’ Retirement Act, was signed by the President on June 29, 2015. See all Public Safety Employees’ Exemption to the Early Withdrawal Penalty

Tsp 1099 r