While most states tax TSP distributions, these 12 don’t: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming, Illinois, Mississippi and Pennsylvania.
- But as of today, the vast majority of federal employees’ savings are in the traditional TSP, which means that withdrawals will be subject to federal taxes. While most states tax TSP distributions, these 12 don’t: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming, Illinois, Mississippi and Pennsylvania.
Which state is the most tax friendly for retirees?
1. Delaware. Congratulations, Delaware – you’re the most tax-friendly state for retirees! With no sales tax, low property taxes, and no death taxes, it’s easy to see why Delaware is a tax haven for retirees.
Is TSP taxable in New York?
DiGianni, are: (1) Whether distributions from the Federal Employees’ Thrift Savings Plan (TSP) are tax free at the New York State level. The TSP is a retirement savings and investment plan for Federal employees. The TSP was established in the Federal Employees’ Retirement System Act of 1986.
What state does not tax your 401k?
Some of the states that don’t tax 401(k) include Alaska, Illinois, Nevada, New Hampshire, South Dakota, Pennsylvania, and Tennessee. You can save a lot of money if you live in these states since your retirement income will be exempt from taxation.
What are the 37 states that don’t tax Social Security?
37 States That Don’t Tax Social Security Benefits Plus Washington D.C.
- Alaska (no state income tax)
- Florida (no state income tax)
What states do not have a state tax?
There are currently nine states without income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.
What do I do with my TSP after I retire?
Many people in retirement elect to withdrawal the entire amount and transfer the TSP to an IRA. Essentially, when you retire you have 4 options for your TSP:
- Begin regular (likely monthly) installment payments.
- Purchase an annuity.
- Leave it in the TSP and let it grow.
- Make a single withdraw / transfer the TSP to an IRA.
At what age is 401k withdrawal tax free?
Withdrawals made before age 59 ½ are subject to a 10% early withdrawal penalty and income taxes depending on your tax bracket. However, if you leave your current employer at age 55 or later, you may qualify to get a penalty-free 401(k) withdrawal.