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 crosses the 24 and 32 percent bands, most of it at 32 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. Whenever the federal tax on the withdrawal comes to more than 20 percent of its taxable amount, you owe the difference at filing time or in a quarterly estimated payment. That happens even when every dollar lands in the 22 percent bracket, because 22 percent of the withdrawal is more than the 20 percent held back. 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 free of income tax, always. Converted money can still carry the 10 percent early withdrawal penalty: TSPBK26 applies it when less than five years have passed since January 1 of the conversion year, unless you are 59 and a half or another exception applies. 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 "deemed distribution": the IRS taxes the outstanding balance as if TSP had paid it to you, including any early distribution tax (IRS Retirement Plans FAQs regarding loans, questions 5 and 6). You receive no new cash, because you already got the money when you took the loan. The TSPBK26 withholding table shows that nothing is withheld on a taxed or foreclosed loan for the same reason, so the entire tax bill lands at filing time and has to be paid from other money. The calculator shows a defaulted loan as $0 of cash received and the tax you owe, not as net cash. If you are under 59 and a half and no exception applies, the 10 percent penalty applies too. Roth money follows a TSP-specific rule (TSPBK26 pages 9 and 10): if the loan is foreclosed after you separate, qualified Roth earnings stay tax free, but "If your loan was taxed while you were still active (not separated from service), your Roth earnings will be taxed, even if they were already qualified." The calculator applies that rule when you tick still employed. 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 whose withdrawal stays entirely in the 24 percent bracket and who needs $40,000 of cash has to take out about $52,630 ($40,000 divided by 0.76), and more if part of it reaches the 32 percent bracket, triggers the 10 percent penalty, or you enter a state rate.

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 (%)

Uniformed services: my traditional balance includes tax-exempt pay contributed from a combat zone.

Your 2026 tax year

Filing status

Other income this year, before deductionsFERS annuity, wages, the taxable part of Social Security, interest. Everything except this withdrawal, before the standard deduction is taken off (the tool subtracts it).

Your date of birthThe 10% penalty turns off only for a payment made on or after the day you reach 59 1/2 (26 U.S.C. 72(t)(2)(A)(i)), so this needs the day, not the year.

Date of the paymentCompared against your 59 1/2 date for the penalty. Must fall in 2026: the brackets and deductions here are the 2026 figures only.

Year you left federal serviceThe age 55 rule (50 for public safety) turns on the calendar year you leave: leaving in the year you turn 55 counts even if your birthday comes later (TSPBK26 page 6).I 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.I have a total and permanent disability (unable to do any substantial gainful work, 26 U.S.C. 72(m)(7)). This switches off the 10% penalty at any age. TSP cannot certify it, so you claim it on IRS Form 5329.

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
Married filing separately when your spouse itemizes: your standard deduction is zero, age 65 addition included (26 U.S.C. 63(c)(6)(A); IRS Pub. 501, "Your standard deduction is zero ... if: Your filing status is married filing separately, and your spouse itemizes deductions on their return"), so only your own itemized total counts
A defaulted or foreclosed loan as a deemed distribution: taxed and penalized like a payment, but shown as $0 of cash received and the tax you owe, since TSP pays nothing. A loan taxed while you are still employed taxes the Roth earnings in it even when your Roth balance is qualified (TSPBK26 p.10); a foreclosure after separation does not
Refused rather than priced: a qualified Roth answer before 59 and a half without a disability (26 U.S.C. 402A(d)(2)), an age 59 and a half in-service withdrawal before that date (5 U.S.C. 8433(h)(1)), an RMD before the year you reach 73 (26 U.S.C. 401(a)(9)(C)(v)), and a negative amount
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 IRS counts you as 65 on the day before your 65th birthday (Pub. 501), so anyone born before January 2, 1962 gets the 2026 addition, including a January 1, 1962 birthday
The OBBBA senior deduction of $6,000 for a filer aged 65 or older at year end (born before January 2, 1962, the same test Schedule 1-A uses), INCLUDING its phase-out at 6 percent of modified AGI over $75,000 single or $150,000 joint (26 U.S.C. 151(d)(5)(C)). Inside the phase-out a withdrawal destroys 6 cents of deduction per dollar, so it is taxed at roughly 1.06 times your marginal rate
On a joint return, your spouse's age 65 items when you tick the spouse box: a second $1,650 addition under 26 U.S.C. 63(f)(1)(B) and a second $6,000 senior deduction ($6,000 "for each qualified individual", 151(d)(5)(C)(i)), both phased out together on Schedule 1-A
The traditional and Roth split, with pro rata taxation of non-qualified Roth earnings
Tax-exempt combat zone contributions in a uniformed services member's traditional balance. TSP pays them out pro rata, and they are neither taxed nor hit by the 10 percent penalty, though their earnings are (TSPBK26 pages 2 and 7)
The total and permanent disability exception to the 10 percent penalty, 26 U.S.C. 72(t)(2)(A)(iii), at any age and for in-service payments too, when you tick the disability box
The 10 percent early withdrawal penalty and the exceptions most federal employees reach: age 59 1/2 tested to the DAY against the payment date, separation in or after the year you reach 55, public safety in or after the year you reach 50 or with 25 years, and life expectancy installments
The age 55 and age 50 separation exceptions test the calendar year you left (TSPBK26: "during or after the year you reach age 55"), so the calculator asks for that year and works out the age you reach in it from your date of birth. The age 59 1/2 test is exact, computed as six months after your 59th birthday and compared to the payment date
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 offered for a defaulted loan, which pays no cash)

Not modeled

Roth in-plan conversions less than five years old. TSPBK26 page 3: converted money "may be subject to the 10% early withdrawal penalty tax ... if less than five years have passed since January 1 of the year you made each conversion" unless you are 59 1/2 or another exception applies. The tool does not track conversion dates, so a Roth payment that would otherwise be penalised shows a warning instead
The other penalty exceptions on the TSPBK26 page 6 list: birth or adoption (up to $5,000), emergency expenses (up to $1,000 a year), domestic abuse, terminal illness, medical expenses above 7.5 percent of AGI, qualified disasters, court orders, death and beneficiary accounts, and reservists called to duty. When the penalty is charged, the result names them so you can claim one on Form 5329
Any tax year other than 2026. Every bracket and deduction here comes from Rev. Proc. 2025-32, which covers "taxable years beginning in 2026", so the calculator refuses a payment date outside 2026 rather than price it on the wrong year's law
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. TSPBK26 (Tax Reporting and Withholding): "We do not withhold for state or local income tax." 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 spouse age 65 addition on a married filing separately return. 26 U.S.C. 63(f)(1)(B) allows it on a separate return only when your spouse had no gross income and cannot be claimed as someone else's dependent (IRS Pub. 501), and this tool does not ask. On a joint return it is modeled
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 senior-deduction phase-out runs on modified AGI, and this tool uses the other-income figure you enter plus the taxable part of the withdrawal as a stand-in. If you have above-the-line deductions your real MAGI is lower and your deduction is larger

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 at 62 on top of a $120,000 FERS annuity as a single filer and the withdrawal runs through three brackets: $1,800 of it at 22 percent, $96,075 at 24 percent, and the last $2,125 at 32 percent. TSP holds back $20,000. The real federal bill on that withdrawal is $24,134, so you are $4,134 short before you file. 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.