TSP Withdrawal Tax Calculator

Use the calculator below to estimate federal tax, state tax, 10% early-withdrawal penalty (if any), and the net check from a TSP withdrawal.

Reviewed by Jonathan Teplitsky · Updated June 2026

How TSP withdrawals are taxed

Traditional TSP: all withdrawals ordinary income, stacks on other income at federal marginal bracket + state.

Roth TSP: qualified distribution (59½ AND 5+ year account) = tax-free. Non-qualified: contributions tax-free, earnings taxable.

The 10% penalty and exceptions

Per IRS Topic 558:

The Age-55 Rule — TSP's biggest shortcut

Unique to employer plans. Separate during/after the calendar year you turn 55 → TSP withdrawals immediately without 10% penalty. Still owe income tax, but no penalty.

Critical: it's the calendar year you turn 55, not the exact birthday. Turn 55 in December and retire that March → qualify. Separate at 54 and turn 55 later → don't qualify.

State tax

Eight no-income-tax states: AK, FL, NV, NH, SD, TN, TX, WY.

14 states exempting some/all retirement income: IL, PA full exemption for qualified retirement plans; MS exempts qualified retirement income; AL, HI, IA provide partial/age-based exclusions.

20% mandatory withholding

On any non-rollover Traditional withdrawal. Not the same as your tax bill. 24% marginal → owe 4% more at filing. 12% marginal → refund. Plus 10% penalty if applicable (TSP doesn't withhold for penalty — owed at filing).

Worked examples

Example 1 — $50,000 Traditional, age 58, NOT Age-55: 24% federal + 5% state + 10% penalty = $19,500. Net $30,500.

Example 2 — Same withdrawal, age 56, Age-55 applies: 24% + 5% = $14,500. Net $35,500. Age-55 saves $5,000.

Example 3 — $50,000 qualified Roth, age 62, 10-year account: $0 tax. Net $50,000.

Related

Sources: TSP.gov, IRS Pub 575, IRS Topic 558.

Estimate only. Not tax advice.