[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR1650.42]

[Page 271]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
         CHAPTER VI--FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
 
PART 1650--METHODS OF WITHDRAWING FUNDS FROM THE THRIFT SAVINGS PLAN--Table of Contents
 
            Subpart E--Procedures for In-Service Withdrawals
 
Sec. 1650.42  Taxes related to in-service withdrawals.

    (a) An in-service withdrawal is an eligible rollover distribution 
under the Internal Revenue Code (IRC), and the IRC requires that the 
Board withhold at least 20 percent for Federal income tax purposes from 
any portion of the withdrawal that is not directly transferred to an 
Individual Retirement Arrangement (IRA) or other eligible retirement 
plan. A participant who wants the TSP to transfer all or a portion of an 
in-service withdrawal to an IRA or other eligible retirement plan must 
submit to the TSP Service Office a properly completed Form TSP-75-T, 
Transfer of In-Service Withdrawal. If the participant does not make a 
transfer election, the withdrawal will be disbursed in the form of a 
single payment minus the mandatory tax withholding. The mandatory 
withholding cannot be waived, although a participant can elect to have 
additional taxes withheld by submitting Form W-4P, Withholding 
Certificate for Pension or Annuity Payments, to the TSP Service Office.
    (b) If a participant applies for a financial hardship in-service 
withdrawal and does not make a transfer election, he or she can request 
the TSP to remove additional amounts from his or her TSP account so that 
the amount received after the mandatory 20 percent tax withholding is 
the amount requested (or for which the participant qualifies, if that 
amount is less than the amount requested). This option may be limited by 
the amount of employee contributions and attributable earnings available 
for withdrawal.

Subpart F  [Reserved]