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Alabama does not tax public or private pension plans but the Thrift Savings Plan (TSP) is an elective defined contribution plan, not a pension plan. Distributions from TSP are taxable by Alabama. The Federal Employees Retirement System (FERS) is defined benefit pension plan is not taxed by Alabama.
Alabama does not tax public or private pension plans but the Thrift Savings Plan (TSP) is an elective defined contribution plan, not a pension plan. Distributions from TSP are taxable by Alabama. The Federal Employees Retirement System (FERS) is defined benefit pension plan is not taxed by Alabama.
When the FERS was first made it is and was a 3 tear system. SSR, Federal Annuity, TSP. All three make up the FERS system. So really I’m not completely sure its that cut and dry. There isa base amount contribution by the fed and a matching amount by the fed and an added contribution by the Employee. Alabama dose not tax federal retirement but they do tax a 401k. TSP is not a 401k! I think it’s called a 501? Alabama should make it a lot clearer.
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