AndreaG
New Member

Retirement tax questions

It depends on whether or not the Thrift Savings Plan is a Roth. If it is a Roth, you would have paid taxes on the contributions so you do NOT have to pay taxes on the distributions. If it is NOT a Roth then you deferred the tax on the contributions so you would have to pay taxes on the distributions. In either situation, you do NOT have to pay the additional 10% penalty tax because you are disabled. See Pub 721, page 13-14: https://www.irs.gov/pub/irs-pdf/p721.pdf.  Per IRS Pub 721, page 18 under "disability annuity", if you retired on disability, the annuity you receive is taxable as wages until you reach minimum retirement age. After you have reached retirement age, the distributions are treated as retirement income. See page 18  of Pub 721 for more information regarding the minimum retirement age.