How much tax will I pay on a TSP withdrawal?

A traditional TSP withdrawal is ordinary income. It stacks on top of your other income, so the rate depends on where it lands in the 2026 brackets, not on a flat rate. A single filer with $60,000 of other income who takes $50,000 pays most of it at 22 percent, while the same withdrawal on top of $200,000 of other income is taxed at 32 and 35 percent. If you are under 59 and a half with no exception, add 10 percent of the taxable amount on top under 26 U.S.C. 72(t).

Why does TSP only withhold 20 percent when I owe more?

The 20 percent is a floor set by 26 U.S.C. 3405(c) for eligible rollover distributions, not an estimate of your bill. TSPBK26 states that TSP must withhold 20 percent of the taxable portion not rolled over, and that you may ask for more but cannot ask for less. Anyone whose marginal rate is above 22 percent will owe the difference at filing time or in a quarterly estimated payment. This calculator shows that gap as a dollar figure.

Does the age 55 rule apply to TSP withdrawals?

Yes. TSPBK26 lists payments made after you separate from service during or after the year you reach age 55 as an exception to the 10 percent early withdrawal penalty. The statutory basis is 26 U.S.C. 72(t)(2)(A)(v). Two limits catch people out. You must have separated from federal service, so an in-service withdrawal does not qualify. And the exception travels with the TSP, so rolling the money to an IRA before 59 and a half loses it.

What is the age 50 rule for law enforcement and firefighters?

Public safety employees defined in 26 U.S.C. 72(t)(10)(B)(ii) get the penalty exception at a lower bar. TSPBK26 describes it as payments made after you separate from service during or after the year you reach age 50, or once you have 25 years of service under the TSP. Federal law enforcement officers, firefighters, air traffic controllers, and customs and border protection officers are in that definition. Check the box in the calculator to apply it.

Is a Roth TSP withdrawal tax free?

Your Roth contributions and any money you converted in-plan come out tax free, always. Roth earnings are tax free only when the distribution is qualified, which TSPBK26 defines as five years having passed since January 1 of the year of your first Roth contribution AND you being 59 and a half, permanently disabled, or deceased. If it is not qualified, TSP pays Roth money out pro rata and the earnings share of the payment is taxable.

What happens to taxes if my TSP loan defaults?

An unpaid loan becomes a taxable distribution. The TSPBK26 withholding table shows that nothing is withheld on a taxed or foreclosed loan because the money was already paid to you, so the entire tax bill lands at filing time with no cushion. If you are under 59 and a half and no exception applies, the 10 percent penalty applies too. That combination is why a default is one of the most expensive ways to take money out of the TSP.

Do installments change the withholding rate?

They do. Under the TSPBK26 table, fixed dollar installments expected to last under 10 years are eligible rollover distributions withheld at the mandatory 20 percent. Installments expected to last 10 years or more, and installments based on life expectancy, are periodic payments, and the booklet gives their rate as "as if single with 0 exemptions." You can raise it, lower it, or elect zero. Separately, the IRS form for changing withholding on a periodic pension payment is Form W-4P. Life expectancy installments also carry their own penalty exception.

How does the reverse mode work?

Pick the cash you need to end up with and the calculator solves for the gross withdrawal that gets you there. It does that by searching for the gross amount whose net, after federal tax, any penalty, and the state rate you entered, lands on your target. Because the tax is a step function, the gross is usually noticeably larger than the net. A retiree in the 24 percent bracket who needs $40,000 of cash typically has to take out well over $52,000.

Calculator

TSP Withdrawal Tax

Work out the federal income tax on a TSP withdrawal using the 2026 brackets, see how far the mandatory 20 percent withholding falls short of the real bill, check whether the 10 percent early withdrawal penalty applies to you, and solve the question people actually ask: how much do I have to take out to keep a given amount of cash?

Reviewed by Jonathan D., 20-year federal employee · Formulas verified against IRS and TSP.gov · Updated October 2026

Rule snapshot

Reviewed October 3, 2026 · Sources: IRS Rev. Proc. 2025-32 (2026 rates), TSP: Tax Rules about TSP Payments (TSPBK26), 26 U.S.C. 72(t), 26 U.S.C. 3405(c) · Inputs stay in your browser. Nothing you type is sent to a server or saved.

The withdrawal

Gross withdrawalThe amount leaving your TSP account before any tax.

Type of TSP paymentThe payment type sets the withholding rate. TSPBK26 page 22 lists all of them.

Roth share of the withdrawal (%)

Your 2026 tax year

Filing status

Other taxable incomeFERS annuity, wages, the taxable part of Social Security, interest. Everything except this withdrawal.

Your age on December 31Drives the 10% penalty test and the age 65 deduction.

Age when you left federal serviceI am still a federal employee

State income tax rate (%)A flat rate you supply. Many states exempt part or all of retirement income, so check your own rules.

Itemized deductions (optional)Leave blank to use the 2026 standard deduction for your filing status.

I am a public safety employee under 26 U.S.C. 72(t)(10)(B)(ii). Federal law enforcement officers, firefighters, air traffic controllers, and customs and border protection officers are on that list. This unlocks the age 50 and 25 year exceptions.

What this models, and what it does not

Read the second list before you act on the number.

What this models

Federal income tax on the withdrawal using the full 2026 rate schedule for all four filing statuses, computed as the difference your withdrawal makes to your total tax
The 2026 standard deduction, plus the age 65 addition under 26 U.S.C. 63(f), or your own itemized total if it is larger
The traditional and Roth split, with pro rata taxation of non-qualified Roth earnings
The 10 percent early withdrawal penalty and the exceptions most federal employees reach: age 59 1/2, separation at 55 or later, public safety at 50 or 25 years, and life expectancy installments
TSP withholding by payment type, including the mandatory 20 percent, the 10 percent default, and the wage style rate
The gap between what TSP withholds and what you actually owe
A flat state income tax rate you supply
Reverse mode: the gross withdrawal needed to net a target amount

Not modeled

Capital gains and qualified dividend rates. A TSP withdrawal is always ordinary income, so this only matters if your other income includes gains
The net investment income tax, the alternative minimum tax, and every tax credit
Above the line items that change your adjusted gross income, such as HSA contributions and deductible self-employed health premiums
Medicare IRMAA surcharges. A withdrawal can trigger one two years later. Use the IRMAA Cliff Calculator for that
How much of your Social Security becomes taxable when the withdrawal raises your income. Enter the taxable portion yourself
State rules in detail. Many states exempt some or all retirement income, and the flat rate here cannot capture a bracketed state tax. TSP withholds nothing for state tax on any payment type, so the whole state bill is yours to plan for
Whether your agency filed the "P" employment code on your 1099-R. Without it, the public safety age 50 and 25 year exception does not show on the form and you have to claim it on IRS Form 5329
The OBBBA senior deduction of $6,000 per qualifying person for 2025 through 2028. Leaving it out makes the tax shown here too high, not too low, for filers born before January 2, 1962. The phase-out arithmetic is only published in a draft IRS form right now, so we would rather be conservative than wrong
Precision limit: reverse mode solves to the nearest cent by search, and all other figures round to the cent. Your actual return will differ by small amounts from rounding on Form 1040
Precision limit: the age 59 1/2 and age 55 tests use whole years. The calculator flags age 59 rather than guessing which side of your half birthday the payment falls on

The 20 percent is a deposit, not your tax rate

The single most common surprise in a federal retirement is the April bill after a large TSP withdrawal. TSP withheld 20 percent, the money looked settled, and then the return showed thousands still owed. The 20 percent is not an estimate of anything. It is a statutory floor in 26 U.S.C. 3405(c) that applies to eligible rollover distributions paid to you instead of rolled over, and TSPBK26 is blunt about it: you can ask for a higher rate, you cannot ask for a lower one.

That floor matches your actual rate only if your marginal bracket happens to sit near 20 percent. Take $100,000 out on top of a $120,000 FERS annuity as a single filer and the withdrawal runs through the 24, 32 and part of the 35 percent brackets. TSP holds back $20,000. The real federal bill is roughly $29,000. The shortfall is yours to cover at filing, and if it is large enough, with an underpayment penalty attached.

Withholding by payment type

The rate TSP applies is set by how the IRS classifies the payment, not by how much you take. This table is the operative rule set, transcribed from page 22 of TSPBK26.

TSP withholding rate by payment type, from TSPBK26 page 22
Payment type	IRS classification	Withholding	Can go lower?
Single or partial distribution after separating	Eligible rollover distribution	20% mandatory	No
Installments under 10 years (fixed dollar)	Eligible rollover distribution	20% mandatory	No
Installments 10 years or more (fixed dollar)	Periodic payment	As if single with 0 exemptions	Yes
Installments based on life expectancy	Periodic payment	As if single with 0 exemptions	Yes
Required minimum distribution	Non-periodic payment	10% default	Yes
Age 59 1/2 in-service withdrawal	Eligible rollover distribution	20% mandatory	No
Financial hardship in-service withdrawal	Non-periodic payment	10% default	Yes
Taxed or foreclosed loan	Varies	None, money already paid	Not applicable

Source: TSP, Tax Rules about TSP Payments (TSPBK26), page 22. Statutory basis for the 20 percent floor: 26 U.S.C. 3405(c). Reviewed October 2026.

The exceptions that save federal employees 10 percent

The age 55 rule is the one most people have heard of and the one most often lost by accident. TSPBK26 lists payments made after you separate from service during or after the year you reach age 55 as an exception to the 10 percent penalty, which traces to 26 U.S.C. 72(t)(2)(A)(v). Two conditions do the work. You must have separated, so an in-service withdrawal gets no help from it. And the exception belongs to the employer plan, so money rolled into an IRA before 59 and a half is penalized again.

Public safety employees get a lower bar. Under 26 U.S.C. 72(t)(10), and as TSPBK26 states it, separating in or after the year you reach 50, or having 25 years of service under the TSP, is enough. Federal law enforcement officers, firefighters, air traffic controllers, and customs and border protection officers fall inside that definition, which matters for anyone leaving under the special retirement provisions.

Installments based on life expectancy are the third route. They are substantially equal periodic payments under 26 U.S.C. 72(t)(2)(A)(iv), so they carry no penalty at any age. The cost is rigidity: change or stop them too early and the penalty comes back on everything already paid. Our guide to the 72(t) rule walks through how that unwinds.