Browsing: New Jersey

Q: Will my Thrift Savings Plan withdrawals be taxed at retirement by the state of New Jersey? A: Making a contribution with after-tax dollars typically creates “tax basis” in your account. As long as you keep good records on the amount of after-tax money you contributed to the account, you should not have to pay tax on those dollars again when withdrawn. I’m not an expert in New Jersey tax law, though, and you should consult a certified public accountant who is for specific advice.

Q: Thank you for agreeing to respond to my New Jersey Thrift Savings Plan taxation question. New Jersey does not permit federal employees to contribute pre­tax dollars into TSP accounts. Its position is that TSP was not established under a Internal Revenue Code 401(k) plan. As this impacts many thousands of federal workers in the state, my question is: Presumably at retirement, New Jersey TSP participants will be taxed at the federal level for all TSP distributions, and at the state level for distributions minus contributions which NJ previously taxed (let’s hope so; that alone may be a recordkeeping nightmare).…

Q: I have tried to solicit your opinion several times concerning the taxation of Thrift Savings Plan distributions to individuals who had their contributions taxed going into TSP (because New Jersey doesn’t recognize the tax-exempt status of TSP), but have never received any response. A: I apologize if you did not receive the response you were looking for. I was not aware that I had overlooked any questions. Please submit your question again and I will respond promptly.