Make your payment with a personal check, cashier’s check, or money order made payable to the Thrift Savings Plan. Write your loan number on your check or money order. If you do not know your loan number, check your account on tsp.gov or call the ThriftLine at 1-877-968-3778 (or 404-233-4400 outside the U.S. and Canada). Sign your check (but do not endorse it). Do not send cash. If you want to make payments for more than one loan, send a separate check (or money order) and coupon for each ...
Full Answer
How do you borrow money from TSP?
- Fully repaying the loan
- Partially repaying the remaining balance and taking a taxable distribution on your outstanding loan balance
- Taking a taxable distribution on your entire outstanding loan balance
How to start TSP payments?
Start, change, or stop contributions. In most cases, you’ll use your agency’s or service’s electronic payroll system to start, change, or stop your TSP contributions. For example, civilian payroll systems include Employee Express, EBIS/GRB, LiteBlue, myPay, and NFC EPP. Uniformed services can use myPay (Army, Air Force, Navy, Marine Corps ...
Can you borrow from TSP?
To borrow from your TSP account, you must be a Federal employee in pay status. If you qualify for a TSP loan, the maximum amount you may be eligible to borrow is $50,000; the minimum amount is $1,000. To find out the amount you have available to borrow, visit TSP Loans in the My Account section.
Is a TSP loan taxable income?
Your TSP still gets taxed. The only major difference between the 2 options is that if you use your TSP account to take out a home loan, the interest you pay on that loan is not deductible like a regular mortgage would be. But that's only because you are paying yourself the interest.
How do I repay my TSP loan?
You'll repay the loan slowly over time through a payroll deduction, where the money is taken out of your paycheck automatically. That money will go back into your TSP.Apr 1, 2022
Can I pay TSP loan online?
No, you cannot make loan payments online. When we pay out your loan, we will notify your payroll office immediately to begin deducting loan payments from your salary each pay period.
Can a TSP loan be paid off early?
The IRS treats the amount of the declared taxable distribution as taxable income . In addition, if you are under age 59 ½, you may have to pay a 10% early withdrawal penalty tax . Once a taxable distribution has been declared, the loan is closed and you will not be allowed to repay it .
What happens if I don't pay back my TSP loan?
Leaving federal service If you do not repay your loan in full, a taxable distribution of the outstanding balance of your loan will be declared. If that happens, you may be able to roll the amount of the distribution into an IRA or eligible employer plan within 60 days to avoid taxes and penalties.
What happens if I overpay my TSP loan?
If the TSP receives a payment that repays the outstanding loan amount and overpays the loan by $10.00 or more, the overpayment will be refunded to the participant. Overpayments of less than $10 will be applied to the participant's account and will not be refunded.
Can I pay off my TSP loan with a credit card?
The first situation that it may make sense to use a TSP loan is to pay off high-interest loans such as credit cards. In many cases, credit card interest can be 15%-20% while the current interest rate on a TSP loan is 1.375% (as of 3/30/21).
Can I use my TSP to pay off my mortgage?
What Not to Do. Generally, it's not a good idea to withdraw from a TSP or an IRA to pay off a mortgage. If you withdraw before you turn 59½, you may incur taxes and early-payment penalties.Sep 29, 2019
Do I have to report a TSP loan on my taxes?
No, everything that needs to be reported concerning a TSP (Thrift Savings Plan) account is reported on your W2. The loan re-payment does not involve deductible interest since you did not list your primary home as collateral.Jun 5, 2019
Do you pay taxes on a TSP loan?
When you contribute to the traditional TSP, you get a tax deduction today but will have to pay taxes on that money and the growth when you take it out in retirement. However, when you take a TSP loan, you don't owe any taxes on that money right away but you technically do pay taxes on it when you repay the loan.Oct 14, 2020
When requesting a TSP loan, must you indicate if you are married?
When requesting a loan, you must indicate if you are married, even if you are separated from your spouse. FERS or uniformed services participants: Your spouse must consent to your TSP loan by signing the Loan Agreement that you print from My Account.
What is a TSP-16?
For more information, please refer to Form TSP-16, Exception to Spousal Requirements, ( TSP-U-16, for uniformed services members).
How long does it take to get a loan from a bank?
If you successfully complete the entire loan process online, and are approved, you will receive your money in 8 to 13 business days. If you submit a paper loan agreement, it may take several weeks. You may track the status of your loan by logging in to My Account or by contacting us.
Can you receive TSP funds by EFT?
You will not have the option of receiving your funds by electronic funds transfer (EFT). If your account is invested in more than one TSP fund, your loan payments will be deducted proportionally from the traditional and Roth contributions and earnings in each fund.
What is thrift savings plan?
The Thrift Savings Plan was designed to provide you with income after you retire . The amount you will have in your account at retirement depends on the decisions you make—how much you contribute, how you invest, and whether you take money out of your account —before you retire .
Can I get a loan if I have a court order?
If you have a court order against your account, you will not be able to get a loan. We must honor certain orders, such as those that enforce payment of child support or alimony, or that award a portion of your account to a former spouse . When we receive a court order, a hold is placed on your account . You cannot get a loan until the court order has been satisfied . For more information about court orders, read the TSP booklet Court Orders and Powers of Attorney, available from tsp .gov, the ThriftLine, or your agency/service .
How much money do I need to pay for a TSP loan?
A TSP loan may be right for you if you have at least $1,000 of TSP contributions in your account, you need money to pay for a primary home or for other needs, and you expect to have room in your budget to cover repayment over the term of the loan. But there are some downsides to borrowing from your TSP account.
What is a TSP loan?
A TSP loan is a loan from a Thrift Savings Plan account. It allows eligible TSP account holders to borrow from their TSP savings and then pay back the money they borrowed, along with interest, to their account.
Why is TSP loan attractive?
A TSP loan may be attractive because payments are usually automatic through payroll deductions, so they come straight from your paycheck, which can make the loan easy to repay.
How long does it take to repay a TSP loan?
Your other option is to take out a general-purpose TSP loan for general expenses or a large purchase. You’ll have to repay this type of loan within one to five years, depending on the loan term. You don’t have to document what you’re using the money for when you apply for a general-purpose loan, so there’s less paperwork involved.
How long do you have to close a TSP loan?
If you leave federal service while you have a TSP loan, you’ll have to close the loan within 90 days of the date when your agency or service reports your separation. Here are your options for repayment if that happens. If you don’t repay the loan in full, you’ll have to pay federal income tax on the unpaid balance.
What is the purpose of a TSP loan?
While the purpose of a TSP account is to help save for retirement, a TSP loan might help you cover emergency expenses or even help pay for a new home. Both federal government employees and members of the uniformed services (which includes members of the military and more) may be eligible.
How long does a TSP loan last?
TSP home loans must be repaid within one to 15 years, depending on the terms of the loan.
How long do TSP payments last?
Payments expected to last 10 years or more and payments based on life expectancy have different tax withholding requirements from those expected to last less than 10 years, and they are not eligible to be transferred. If a participant’s change request puts payments in a different duration category, the TSP will automatically change the withholding to the default for the new duration or to any allowable option chosen by the participant. If a participant is currently transferring all or part of the installment payments to an IRA or eligible employer plan and the change request makes the payments ineligible for transfers (by changing their expected duration to 10 years or more), the participant’s transfers will stop. Participants should be aware of these tax implications before they make changes to their installment payments. The TSP tax notice Tax Information for TSP Participants Receiving Installment Payments
What is the TSP booklet?
The TSP booklet Withdrawing From Your TSP Account for Separated and Beneficiary Participants provides information about the TSP withdrawal options and how they affect participants’ accounts. Agency/Service representatives should strongly recommend that participants read this booklet and the TSP tax notice Tax Information for TSP Participants Receiving Installment Payments before requesting a withdrawal.
What happens to a participant's payment if there is insufficient funds?
However, if that source has insufficient funds to make payments, those payments will automatically switch to being made from the other source. Payments will not stop until the participant elects to stop them or there is insufficient funds in the entire participant account.
Can I change my address on TSP?
No. If you are separated from federal employment, you may change your address online at My Account: Profile Settings. You will need to enter your TSP account number and your web password to make this change. You may also call the ThriftLine to change your address.
Can you stop installment payments?
Participants can stop installment payments; change the frequency, amount, or source (traditional or Roth) of payments; and make other changes regarding direct deposit, tax withholding, and transferring to an IRA or eligible employer plan. These changes can be made at any time.
Can I complete a TSP form online?
Depending on the circumstances, the request may be completed entirely online. If signatures or additional information is required, the participant will need to print the form, gather the necessary signatures, have the form notarized, and then send it to the TSP.
Can you change the amount of your installment payments?
Participants can change the dollar amount of their installment payments at any time. Note: If a participant is receiving life-expectancy payments and changes the frequency or amount of those payments, the participant will be automatically changing from life-expectancy to dollar amount payments. The participant will not be able to change back ...
