Q. I am thinking of making a partial withdrawal of my TSP. I saw on the TSP-77 withdrawal form that the federal government will charge me a 20 percent income tax when making the withdrawal. How much income tax will the state of California charge me upon the withdrawal?
A. The federal withholding is mandatory on certain withdrawals, but remember that it is not tax, it is only a deposit against your tax bill for the year. You will find rules about withholding from TSP payments on page 3 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf. There is no mandatory withholding for state taxes required.
