topic Federal TSP withdrawal one time and NJ tax help in Retirement tax questions

Federal TSP withdrawal one time and NJ tax help

Polo225 — Sun, 15 Feb 2026 22:15:04 GMT

I am retired federal employee living in NJ. This past year I took a one time withdrawal from my federal TSP (a federal 401k). In NJ the contributions made to my TSP are taxed, so not all of my withdrawal is taxable. I am having a tough time figuring what to do in turbotax both state and federal. I need to make sure the NJ return does not tax the money I contributed.... Any guidance would be greatly appreciated

Re: Federal TSP withdrawal one time and NJ tax help

fanfare — Mon, 16 Feb 2026 03:41:40 GMT

Section 401(k) Plans
If you made contributions:
On or after January 1, 1984, your contributions to your 401(k) Plan were not included as income when they were made, unless the contributions exceeded the federal elective deferral limit. As a result, you must report all distributions on your New Jersey Income Tax return because they are fully taxable;
see here: https://www.state.nj.us/treasury/taxation/pdf/pubs/tgi-ee/git1.pdf

@Polo225

Re: Federal TSP withdrawal one time and NJ tax help

Polo225 — Mon, 16 Feb 2026 04:04:24 GMT

I appreciate your reply, however, I did not ask about a 401(k). I asked about a federal TSP. Thrift savings plan. Federal TSP‘s are different than a 401(k). A 401(k), your rules apply that you just posted. A federal TSP in the state of New Jersey, all contributions to the TSP are not tax deferred. Therefore, in order to not be double taxed, when I take a withdrawal, there is a formula that you need to calculate to figure out how much of your TSP withdrawal is taxable in the state of New Jersey. I have that information, however, I have no Idea how to enter the data in TurboTax

Re: Federal TSP withdrawal one time and NJ tax help

fanfare — Mon, 16 Feb 2026 16:24:58 GMT

Those previously taxed TSP contributions become your NJ basis. When you later withdraw from the TSP, NJ allows an excludable portion representing recovery of that basis—calculated under:

the Three-Year Rule (if you’ll recover your contributions within 36 months and your employer contributed), or
the General Rule (otherwise).

TurboTax should let you pick one or the other.

@Polo225