By Mike Miles
January 13th, 2014 | Uncategorized
Q. I’m planning on retiring this year at age 62 under FERS. I will have an outstanding Thrift Savings Plan loan balance of $16,000 and was not planning on repaying the rest of the balance and was needing to find out if the outstanding balance will be considered income and taxed with my other income for the year at the end of the year, since it will be tagged as taxable distribution?
A. Yes, any loan balance outstanding 90 days after separation will be declared a taxable distribution at that time and reported as ordinary income for that year.