TSP 415(c) annual addition limit


Q. I recently returned from Afghanistan.  I maxed tax exempt ROTH TSP contributions ($17,500) and made tax exempt Traditional TSP contributions as well.   All contributions were tax exempt between January and June.

Upon redeployment, I planned to continue to contribute tax deferred contributions not to exceed $17,500 between July and December in accordance with the 415(c) annual addition limit of $52,000.  However, my TSP contributions were stopped.  DFAS told me I could make NO additional Traditional TSP contributions as I had left the CZTE and was no longer eligible to contribute over the TSP limit.

I spoke with a TSP representative and they stated they thought I was still eligible to contribute to TSP up to the $52,000 (not to exceed tax deferred Traditional TSP contribution limit and ROTH TSP tax exempt contribution limit) since I had been deployed during the year.

All feedback on my eligibility to make tax deferred contributions (not to exceed $17,500) to Traditional TSP toward the 415(c) annual addition limit after redeploying is appreciated.

A. If you are a member of the uniformed services, your Roth contributions are subject to the elective deferral limit ($17,500 for 2014 and $17,500 for 2013) even if they are contributed from tax-exempt pay. If you want to contribute tax-exempt pay toward the annual additions limit, you will have to elect traditional contributions for any amount over the elective deferral limit.
In addition, if you are eligible to make catch-up contributions and you are deployed to a designated combat zone, you will not be able to make any traditional catch-up contributions from your tax-exempt pay. However, Roth catch-up contributions from tax-exempt pay are allowed. (via TSP.gov)


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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