One other question I have is, with the CARES Act withdrawal from my TSP according to TSP I am able to pay back my withdrawal back (fully or partially) into my TSP account and not have it count as taxable income.
How will I determine that or how does that work? Do I need to know right now how much I plan on paying back so I know how much would be taxable and then could setup the taxable portion over 3 years?
Just was not sure but I did plan to pay back at least 50% of what I withdrew back into my TSP, if not more before the 3rd year of the date I did the withdrawal.
Just was not sure how I would do this in taxes at all.
This was an xerept from the TSP website regarding CARES act withdrawal.
Favorable tax treatment for coronavirus-related withdrawals
The tax advantages for qualified individuals who took coronavirus-related distributions are as follows:
-The IRS waived the 10% additional tax on early distributions.
-You may spread the taxable income “ratably” over a three-year period, starting with the year in which you receive your distribution. For example, if you receive a $9,000 coronavirus-related distribution in 2020, you could report $3,000 in income on your federal income tax return for each of 2020, 2021, and 2022. This is optional; you can also choose to include all of the income in the year of the withdrawal.
-You may repay all or part of the amount of your coronavirus-related distribution to an eligible retirement plan, provided that you complete the repayment within three years after the date that you received the distribution. If you repay a coronavirus-related distribution, the distribution will be treated as though it were repaid in a direct plan-to-plan transfer so that you do not owe federal income tax on the distribution. The law allows you to repay coronavirus-related distributions to the plan from which you received it or to another eligible retirement plan.
