I took a loan out of my Thrift Savings Plan (retirement plan). I did not get a 1099-R and I am paying the loan back. Do I count this as income?

[DoninGA · Accepted solution]

A loan from a tax deferred retirement account is not reported on your tax return.  You would only receive a Form 1099-R if you had a distribution from the fund or you default on the loan, then it becomes a distribution.

[PMToyne]

I’m not so sure this response is correct. I actually have an active loan out at the moment and the payments are current, never late, never missed and I received a 1099-R just today in the mail. I have already filed my 2022 tax return so now I’m confused if I was supposed to have included the loan as income or not and if I will have to file an amended return. I should note, that I opted to pay taxes on the loan when I initially took it out and they reflect on the 1099-R as being withheld. 

[dmertz]

The answer is essentially correct, except that the plan can also force repayment of the loan if you separate from service.

@PMToyne , what is the code in box 7 of your Form 1099-R?

Are you still working for the employer that provides this plan?

[PMToyne]

@dmertz The code is 1 and yes I still work for the department. 

[ShirlynW]

No, the loan does not count as income. If you default on a TSP loan, you will owe tax for that year, on the taxable amount you did not pay. Then you will receive a 1099-R.

[dmertz]

A code-1 Form 1099-R has nothing to do with a loan from the plan.  A code-1 Form 1099-R would seem to be reporting a hardship distribution, not a loan.  I suspect that you received such a distribution, not a loan, and is a distribution that is not permitted to be returned to the plan or to any other retirement account.

[sunshiner1]

You need to call TSP. They screwed up a LOT of peoples 1099"s. There is a Facebook group call Thrift Savings Plan (TSP). It is being talked about profusely . With the new TSP site and the group that took it over they screwed up SO MUCH STUFF.  I highly encourage you to join that group and see what they are saying to do. 

I retired from the VAMC in 05/2021.  It's a really good group. 

[LindaS5247]

Your repayments of a loan from your Thrift Savings Plan are not considered income and you do not have to report them.

Loans are not taxable distributions unless they fail to satisfy the plan loan rules of the regulations with respect to amount, duration and repayment terms. In addition, a loan that is not paid back according to the repayment terms of the plan document is treated as a distribution from the plan and is taxable.

Click here for more information of the taxability of loans from retirement plans.