Ask The Experts: Money Matters

By Mike Miles

FERCCA employee switching to CSRS Offset

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Q. I have elected to switch to CSRS under FERCCA. I understand I will be given the option of the refund of my portion of Thrift Savings Plan contributions. When I left the Postal Service after my first seven years in the 1980s, I withdrew my CSRS money. If I take the refund of my portion of TSP deposit over the CSRS maximum contribution, can I pay back the withdrawn CSRS money without tax implications?

A. The refund of your TSP contributions will be taxable, since you never paid taxes on the money when you earned it. You may then use after-tax money to make a CSRS redeposit, which is not tax-deductible.

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