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New Member
posted Apr 3, 2024 11:46:12 AM

Is a transfer of funds from a TSP account to a traditional IRA considered a contribution to the traditional IRA?

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1 Best answer
Level 15
Apr 3, 2024 12:38:48 PM

@willjonseth 

 

No, it is not a contribution.   Contributions are very limited, $$-wise, as to how much can be "Contributed"..... A direct-transfer, or a rollover from a TSP account to an IRA is not $$-limited.

 

IF a 1099-R is issued for that transfer, you enter it as a distribution in the software, and the follow-up questions vary depending on exactly what codes are in box 7. 

IF box 7 contains a letter "G", that indicates a direct-transfer, and you just need to indicate in the follow-up questions whether it went into any kind of ROTH account...if it didn't go into a ROTH account, then a Traditional IRA is assumed.

IF box 7 is some other number, then they issued a check, and in the follow-up questions you need to indicate that it went into another retirement account, and then exactly how much went into the IRA (because some people keep some of the $$ and don't put it all back into the IRA, and also any withholding kept on distribution did not end up in the new IRA unless YOU made up the difference) 

2 Replies
Level 15
Apr 3, 2024 12:38:48 PM

@willjonseth 

 

No, it is not a contribution.   Contributions are very limited, $$-wise, as to how much can be "Contributed"..... A direct-transfer, or a rollover from a TSP account to an IRA is not $$-limited.

 

IF a 1099-R is issued for that transfer, you enter it as a distribution in the software, and the follow-up questions vary depending on exactly what codes are in box 7. 

IF box 7 contains a letter "G", that indicates a direct-transfer, and you just need to indicate in the follow-up questions whether it went into any kind of ROTH account...if it didn't go into a ROTH account, then a Traditional IRA is assumed.

IF box 7 is some other number, then they issued a check, and in the follow-up questions you need to indicate that it went into another retirement account, and then exactly how much went into the IRA (because some people keep some of the $$ and don't put it all back into the IRA, and also any withholding kept on distribution did not end up in the new IRA unless YOU made up the difference) 

Level 15
Apr 3, 2024 12:40:37 PM

Rollovers and conversions are not a new contribution.  Only enter it from the 1099R, nowhere else.