Federal Retirement Deductions

[wtomlemons]

I worked for the IRS in 2020 for the first time.  They deducted for 2 different retirement plans, marked TSP-FERS & Retirement on my check stubs.  When I received my 2020 W-2, the amount of TSP-FERS shows up in box 12-code D & the same amount is deducted from my gross pay in box 1.

I don't see the other retirement amount on my W-2.  The government website says it's a 4.4% deduction for their basic benefit plan.  It looks like it is an annuity but It's hard to find much information. 

Is this deductible anywhere?

[Critter-3 · Accepted solution]

First it is not deductible on the return if that is what you want to know ... and the non qualifying contributions may or may not show in box 14 of the W-2 form.  

[ThomasM125]

To the extent the contribution is deducted from your wages reported in box 1 on your W-2 form, you are getting a deduction for the contribution, since your wages have been reduced, and that reduces your income tax.

However, the deduction has already been factored into your income as reported on your W-2 form, so you don't get an additional deduction when you prepare your tax return. In other words, all you need to do is enter your W-2 and you get the deduction automatically.

[wtomlemons]

I don't think you understand my question.

I know the contribution marked "TSP-FERS" is taken care of.

It shows up in box 12/code D & wages in box 1 have been reduced.

My question has to do with the separate contribution marked "Retirement".

It doesn't show up anywhere on my W-2.

[Critter-3]

Again it is NOT entered anywhere on the income tax return ... you are buying into an annuity with after tax money just like any other annuity purchase that is not a retirement account.   When you take out distributions from this annuity the 1099-R will report how much is taxable and how much is a return of contributions.  

[dmertz]

Amounts contributed to your FERS credit are not deductible on your tax return.  They are also not contributions that would contribute to your qualification for the Retirement Savings Contributions Credit, so they appear nowhere on your W-2 or on your tax return.

During payout, a portion of each of your FERS distributions will be a non-taxable return of your original investment in the plan, so you won't be paying taxes twice on this money.

[dmertz]

I've revised my reply.