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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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I am a retired USPS employee. I filed my taxes with H & R Block

Customer Question

I am a retired USPS employee. I filed my taxes with H & R Block in 2013 and they did not report my Thrift Savings to the State of Alabama since I am retired and don't pay state taxes any longer. Now the State of Alabama says I owe them $3700.00. I contacted the TSP and they responded by saying they are tax exempt per 26 USC 501. However they say it could be taxable. Is TSP a defined benefit? I need and would greatly appreciate your help. I know a former USPS employee that received a letter from TSP and they didn't have to pay state taxes but unfortunately I can't get that letter. Thank you for your time.
Submitted: 6 months ago.
Category: Tax
Expert:  Lev replied 6 months ago.
Distribution from Thrift Savings plan is taxable.You should receive a reporting form 1099R. Please verify if you have that form for 2013?The total distribution is reported on form 1099R box 1 and the taxable amount is reported in box 2a.
Expert:  Lev replied 6 months ago.
Please take a look at this form and let me know what are these amounts.That is for federal tax purposes.However on the state level - income received from United States Civil Service Retirement System benefits is EXEMPT from state income tax.See here appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.