Rollover out of tsp fund to vanguard Tradtional IRA. Tsp stated will hold 20%tax

Forum|Forum|1 year ago
February 22, 2025
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Although it stated Direct rollover on Tsp site, however, when I attempted withdrawal or rollover, it seems it only offers Indirect withdrawal!. If I pursue this indirect withdrawal with 20% withheld, will I get tax again when depositing the whole amount( including the 20% tax withheld by tsp) to my Vanguard Traditional IRA?

Not A Product Question

dmertz

Employee

The TSP is required to offer a direct rollover of at least what would otherwise be the taxable amount of a distribution paid to you. Nontaxable amounts distributed to you have no withholding requirement because only taxable amounts paid to you are subject to the 20% minimum withholding.

If you for some reason end up receiving a distribution paid to you and 20% of the taxable amount is required to be withheld for federal taxes, you can substitute other funds to complete the indirect rollover of the full gross amount of the distribution.