The following information is intended as a summary. Please consult a trusted tax advisor for more information.

The IRS requires TRS to withhold a minimum of 20% of the taxable portion of any withdrawal that you do not directly roll over to an eligible successor program; you can elect a higher percentage.

The taxable portion of any withdrawn funds is taxable upon receipt and will be reported to the IRS in January following the calendar year in which it is distributed. The amount withheld would be forwarded to the IRS and credited toward your taxes for the year of distribution. (Within 60 days of the distribution date, you may roll over any taxable amount you receive, or roll over the entire amount of the distribution by replacing the amount withheld by TRS with money from other sources.)

The IRS may impose a 10% early distribution tax on taxable funds you withdraw before reaching age 59½.

For TDA withdrawals, distributions generally are federally taxable and may be subject to state and local taxes; please check with your tax advisor. If a TDA loan is deemed a distribution in the same tax year in which you receive a TDA direct withdrawal, the IRS would require TRS to withhold 20% of the taxable portion of the deemed distribution from the TDA withdrawal; this withholding would apply if your loan balance is deemed a distribution before your TDA withdrawal is processed, and would be in addition to the 20% withholding required separately for the TDA direct withdrawal. The total amount withheld would be forwarded to the IRS and credited toward your taxes for the current year.

There are two types of Roth withdrawals and the taxability for each is different. See the FAQs about Qualified Roth withdrawals and Non-qualified Roth withdrawals for more information.