Two 1099-R's Received

Managing your TSP and alternate investment options after retirement or separation from service.

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Two 1099-R's Received

Post by evilanne »

I got 2 separate TSP 1099-Rs today. In box 7, the distribution code in 2 on the first one and 1 on the second.
Code-Description
1-Early distribution, no known exception (in most  cases,  under age 59 ½)
2-Early distribution, exception applies (under age 59 ½)

Just a little frustration on my part, the Code 1 results in Tax Penalty unless you meet an exception-- Substantially Equal Periodic Payment (SEPP). It requires a couple of extra steps in TurboTax to eliminate the penalty by putting dollar amount in the exception screen but I'm just annoyed at the new contractor for changing the code.

Currently on hold with TSP

fish8me
Posts: 19
Joined: Thu Jan 07, 2016 10:36 am

Re: Two 1099-R's Received

Post by fish8me »

Same here but I've so far received one 1099... I did make a withdrawal last year and just got my 1099 from TSP... I also got box 7 checked with a 1. I'm retired 1811 so it's listed as "Tax Penalty with No Exceptions".

I'm on the horn with a TSP rep that unfortunately seems like this is his first week on the job. He's making a case no to be forwarded to Operations... I'm been told that it will be reviewed by TSP and corrected if necessary.

Note that Christ Barfield sent out a tweet yesterday stating the same error from TSP on box 7.

bakismax
Posts: 3
Joined: Tue Nov 28, 2017 2:19 pm

Re: Two 1099-R's Received

Post by bakismax »

Following to see if I need a corrected 1099. I saw this post & checked my 1099R from TSP. I got the 1 in box 7 also. My previous years were checked 2 in box 7 as I fall under early LEO retirement.

Fallingh2o
Posts: 8
Joined: Thu Jul 25, 2019 12:36 pm

Re: Two 1099-R's Received

Post by Fallingh2o »

FYI - I reached out to Larry Cosme who is the national president for FLEOA. He said that he is aware of the 1099R issue and that FLEOA is currently addressing this matter. Hopefully FLEOA will get this matter resolved quickly for all of us.

Also, when I reported my 1099R issue to the TSP I asked the Rep how long would it take to get a corrected 1099R and the Rep said about 2-3 weeks, but that I could call each week to check the status.

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: Two 1099-R's Received

Post by evilanne »

I requested corrected 1099-R & my representative also sent case to operations but did not give me a specific date. She said she did mark it as a priority and to check my notifications in my account.
The people answering the phone generally have no clue about this stuff and are just following their processes.

I am starting to believe that the prior contractor was really pissed off at losing the contract and must have only transferred minimal data (whatever was required by the contract, which was probably inadequate) to the new contractor OR the new one is totally incompetent, maybe both.

fish8me
Posts: 19
Joined: Thu Jan 07, 2016 10:36 am

Re: Two 1099-R's Received

Post by fish8me »

Just 3 more years of this incompetence is what I'm waiting for,,,. After that they'll have $201 just in case they ever get their act together.

fish8me
Posts: 19
Joined: Thu Jan 07, 2016 10:36 am

Re: Two 1099-R's Received

Post by fish8me »

I got this email below from the ThriftLine Service Center...Sort of a poor way to say they made an error but at least they are apparently correcting the 1099.

In reviewing your 2022 1099-R forms recently sent from the Thrift Savings Plan (TSP), we have determined that the distribution code included on one or more of your forms would result in the incorrect tax treatment of your distribution. As a result, we will be sending corrected 1099-R forms to your mailing address on file. Please dispose of any forms you have already received from the TSP.

Your new set of 1099-R forms will be mailed the week of January 30, please allow 5 - 7 business days for standard US Mail delivery. They will also be available for download from your Secure Participant Mailbox (SPM) in My Account after February 20, 2023. No additional action is required from you at this time.

If you have any questions, please contact the ThriftLine at 1-877-968-3778 between 7 a.m. and 9 p.m. Eastern time Monday thru Friday.

Sincerely,
ThriftLine Service Center

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: Two 1099-R's Received

Post by evilanne »

Thank you fish8me!
I have many emails from TSP but did not get that one.

fish8me
Posts: 19
Joined: Thu Jan 07, 2016 10:36 am

Re: Two 1099-R's Received

Post by fish8me »

I just got in the mail 2, 1099 for my 2022. One shows the code 2 in block 7 with my correct withdrawal amount for 2022, and the other is code with a 1 in block 7. I don't know why the one code with a 1 was mailed since it shows $0 in the Gross Distribution box.

3 more years Vern... Thats all I have till I exit the TSP

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: Two 1099-R's Received

Post by evilanne »

I'll see if I get any thing corrected before I file my taxes. This morning I was told it was in the mail, but it could take 5-7 days. I did get a text saying the they are processing my LE payment. Not sure whether that will deduct the additional amount or not since they just updated it today. The lady I spoke with was very nice & helpful compared to my prior phone calls this year. And you want to leave all this fish8me? I may beat you ...Jan 1 2025...if they don't get their act together

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: Two 1099-R's Received

Post by evilanne »

I filed my tax return Thursday. Still had not gotten any corrected 1099-R, I got 2 Notifications in TSP.gov with the exact same 1099-Rs that I got by mail with 2 different codes.

fish8me
Posts: 19
Joined: Thu Jan 07, 2016 10:36 am

Re: Two 1099-R's Received

Post by fish8me »

Chris Barfield just covered this on his last newsletter. He mentioned that you can use the 1099 but you have to add another form to indicate the correction noting the non-penalty withdrawal. Read his lates article from his newsletter.

https://www.barfieldfinancial.com

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: Two 1099-R's Received

Post by evilanne »

I finally got my corrected 1099-Rs today.

My tax refund is schedule to be paid this Friday 3/3 :mrgreen:

Kudos to the IRS for processing it so quickly!

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