TSP over contribution

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Cooperd0g
Posts: 49
Joined: Mon Apr 02, 2012 3:50 pm

TSP over contribution

Post by Cooperd0g » Sun Feb 02, 2014 8:05 am

I am active duty military and receive no match. I followed all the information on the TSP website, which was to take the total amount ($17,500) and divide by 12. Then round up to the nearest dollar to ensure you max out the annual contribution. The TSP is supposed to automatically stop pulling money out to ensure you don't over contribute. So I put $1459 per month and they took out $1459 all 12 months. My W-2 shows a contribution of $17,508. These are all Roth contributions. I suppose I need to request a return of excess now, don't I?

brybir
Posts: 4
Joined: Thu Jan 30, 2014 10:19 pm

Re: TSP over contribution

Post by brybir » Sun Feb 02, 2014 9:06 am

You should be fine. Check out the TSP guidance on this subject:

https://www.tsp.gov/PDF/formspubs/oc91-13.pdf

Check out part II on page 4, it walks through the entire excess deferrals process that the TSP uses. Long story short, they should refund your $ before April 15 and you should not have to do anything. However, you will get an extra few pieces of paperwork from them since it will be noted as a distribution from your TSP.

Of note, your payroll office should not have allowed the excess contribution. Every agency, and DOD, is supposed to have rules in place to avoid this. Might be something to take up with them. However, since your uniformed, I would not bother calling DFAS or the payroll people, since it usually is a huge waste of time! At least it always has been when I try talking to them.

Cooperd0g
Posts: 49
Joined: Mon Apr 02, 2012 3:50 pm

Re: TSP over contribution

Post by Cooperd0g » Sun Feb 02, 2014 9:14 am

Thanks, that is the same document I found and just was looking for confirmation I was on the right track. It is just a little frustrating since it isn't supposed to happen. Though the TSP-44 form says not to file it if I don't have any other plans because they will automatically refund the excess. And upon further review of my January LES, there is an $8 credit on there. I guess I'm in the clear.

abracadabra11
Posts: 111
Joined: Sat May 01, 2010 2:09 pm

Re: TSP over contribution

Post by abracadabra11 » Sun Feb 02, 2014 8:09 pm

I over-contributed by about $3500 for 2013 - it was refunded to my bank account on this month's LES automatically.

IFKC
Posts: 124
Joined: Sun Aug 18, 2013 5:10 pm

Re: TSP over contribution

Post by IFKC » Sun Feb 02, 2014 11:26 pm

Yeah, OP, for the reasons described, you're fine (in that it will be automatically corrected).

On another note, I called TSP directly about another issue, and, while polite, they were wrong about my issue as well. That makes two out of two...
Tragedy at 17 --> $$$ - mistakes + education (including Bogleheads) = a poster who still knows the least on this forum. Happy father, tepid lawyer.

ChapMan
Posts: 146
Joined: Wed Nov 24, 2010 8:53 pm

Re: TSP over contribution

Post by ChapMan » Fri Nov 14, 2014 11:12 pm

Apparently I may have just overcontributed $3k or so. Does anyone know if anything has changed since the start of this thread? My understanding is that since I put in $17.5k into the Roth TSP and ~$3k into the traditional TSP, my refund will be pro rata such that I'll end up with something like $16.5k in the Roth and $1k in the traditional, and that I don't have to do anything to get it (it'll come automatically around January 2015), right?

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jjg247
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Re: TSP over contribution

Post by jjg247 » Sat Nov 15, 2014 7:33 am

I was under the impression that you could contribute to both a 401k (traditional TSP) and a ROTH. Are you ineligible for ROTH based on income? Or is this a system limitation with TSP?

As long as you stay under income caps for ROTH, in 2015 you should be able to contribute $18k to 401k and $5.5k to ROTH.

Alan S.
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Location: Prescott, AZ

Re: TSP over contribution

Post by Alan S. » Sat Nov 15, 2014 2:27 pm

jjg247 wrote:I was under the impression that you could contribute to both a 401k (traditional TSP) and a ROTH. Are you ineligible for ROTH based on income? Or is this a system limitation with TSP?

As long as you stay under income caps for ROTH, in 2015 you should be able to contribute $18k to 401k and $5.5k to ROTH.
I think you are confusing the Roth TSP with a Roth IRA. For the Roth TSP like other designated Roth contributions, there is no income limit. The income limits only apply to Roth IRAs. By making Roth TSP deferrals your modified AGI will be higher than if you made pre tax deferrals and that higher modified AGI makes it more likely you would be over the MAGI limits for Roth IRA contributions. If you are not over the Roth MAGI amounts, you can contribute to both the Roth TSP and a Roth IRA.

Alan S.
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Location: Prescott, AZ

Re: TSP over contribution

Post by Alan S. » Sat Nov 15, 2014 2:39 pm

Cooperd0g wrote:I am active duty military and receive no match. I followed all the information on the TSP website, which was to take the total amount ($17,500) and divide by 12. Then round up to the nearest dollar to ensure you max out the annual contribution. The TSP is supposed to automatically stop pulling money out to ensure you don't over contribute. So I put $1459 per month and they took out $1459 all 12 months. My W-2 shows a contribution of $17,508. These are all Roth contributions. I suppose I need to request a return of excess now, don't I?
Note that since your small excess elective deferrals were all Roth, the refund is reported differently than for the usual pre tax excess. Since your Roth deferrals have already been taxed (included in your Box 1 W-2 income), when you get the refund before 4/15 you do NOT add the distribution to you line 7 wages. The 1099R will be coded "B" in Box 7, indicating that the return of excess was from a designated Roth.

There may also be INCOME calculated on the excess Roth deferral. This income is taxable in the year you receive it (probably 2015) and you add the income to your line 7 wages for your 2015 tax return. This will be a separate 1099R coded "8". Be sure to differentiate between the two forms. Your W-2 will not be changed after the excess has been returned.

InvisibleAerobar
Posts: 195
Joined: Mon Jan 15, 2018 12:33 pm

Re: TSP over contribution

Post by InvisibleAerobar » Thu Nov 08, 2018 10:55 am

bumping this thread, as I may run into a similar issue.

I like to deal with whole numbers, and I have been contributing $725 into traditional TSP/biweek. This will sum to $18,850 for the entire year, which is $350 over. My question is, would TSP automatically return those contributions so that it's actually $18,500 for the entire year (as in hard-capping the contribution), or do I need to expressly change the contribution amount myself (and change it back for 2019)?

My agency's HR hasn't been very helpful on this, and seems to have given advice contradicting what had been reported in this thread. FWIW, my agency uses myepp of USDA to process HR requests.

Thanks in advance

PFInterest
Posts: 2518
Joined: Sun Jan 08, 2017 12:25 pm

Re: TSP over contribution

Post by PFInterest » Thu Nov 08, 2018 10:58 am

InvisibleAerobar wrote:
Thu Nov 08, 2018 10:55 am
bumping this thread, as I may run into a similar issue.

I like to deal with whole numbers, and I have been contributing $725 into traditional TSP/biweek. This will sum to $18,850 for the entire year, which is $350 over. My question is, would TSP automatically return those contributions so that it's actually $18,500 for the entire year (as in hard-capping the contribution), or do I need to expressly change the contribution amount myself (and change it back for 2019)?

My agency's HR hasn't been very helpful on this, and seems to have given advice contradicting what had been reported in this thread. FWIW, my agency uses myepp of USDA to process HR requests.

Thanks in advance
1- this thread is from 2014, a new one would have been fine.
2- they should just cap it automatically at 18500. youll need to increase for 2019 as the limit is 19K

InvisibleAerobar
Posts: 195
Joined: Mon Jan 15, 2018 12:33 pm

Re: TSP over contribution

Post by InvisibleAerobar » Thu Nov 08, 2018 11:01 am

PFInterest wrote:
Thu Nov 08, 2018 10:58 am
InvisibleAerobar wrote:
Thu Nov 08, 2018 10:55 am
bumping this thread, as I may run into a similar issue.

I like to deal with whole numbers, and I have been contributing $725 into traditional TSP/biweek. This will sum to $18,850 for the entire year, which is $350 over. My question is, would TSP automatically return those contributions so that it's actually $18,500 for the entire year (as in hard-capping the contribution), or do I need to expressly change the contribution amount myself (and change it back for 2019)?

My agency's HR hasn't been very helpful on this, and seems to have given advice contradicting what had been reported in this thread. FWIW, my agency uses myepp of USDA to process HR requests.

Thanks in advance
1- this thread is from 2014, a new one would have been fine.
2- they should just cap it automatically at 18500. youll need to increase for 2019 as the limit is 19K
gotcha; thanks for your help on this

after my post, I went looking and was able to find the following link.

https://www.tsp.gov/PDF/formspubs/tspfs07.pdf

not the first time that HR was very unhelpful when it comes to benefits...

Cunobelinus
Posts: 199
Joined: Tue Dec 04, 2012 5:31 pm

Re: TSP over contribution

Post by Cunobelinus » Thu Nov 08, 2018 11:06 am

Edit: original thread looked to be for AD personnel and you look like a fed. Not sure if what I've written is germane:

I've maxed out the TSP, early, for years with only one issue. The first time it happened, I had to restart my TSP contributions in January (took effect February). But my contributions were still stopped at the max. Every other time, they stop my contributions once I've reached the max and then restart it in January.

Never had any additional paperwork or anything other than a note on my LES indicating I'd reached the max for that year.
I've not heard of any AD folks ever having an issue with "over contribution" either. That could also be because people are hesitant to talk about money though.

My local PSD/CSD office is just about the worst organization I've encountered, both for person-to-person interactions and level of knowledge. I'd hate to have to deal with them for any pay issues and you have my condolences if you have a similar PSD/CSD.

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