This is the page where you will select what type of withdrawal you would like to make from your Tax-Deferred Annuity (TDA) Program account.
Please file this application only if you want all or part of your TDA Program account balance paid directly to you or if you want to make a withdrawal in conjunction with your separation from service. If you are a non-retired member you must have valid date-of-birth documentation on file in order for TRS to process your TDA withdrawal.
In addition, members who are under age 59½ may apply for a hardship withdrawal of their post-1988 TDA contributions if they have a sudden and heavy financial need that they are unable to reasonably meet through other financial resources. (See Hardship Withdrawal Eligibility Guidelines and Eligible Hardships and Required Documentation below.
If you want to directly roll over all or part of your TDA withdrawal into one or more eligible Individual Retirement Arrangements (IRAs) or other eligible successor program(s); you must complete a paper TDA Withdrawal Application (code TD32) and a TDA Direct Rollover Election Form (code TD22).
If you are making a withdrawal in conjunction with or after your retirement, you must complete a paper TDA Withdrawal Application.
If you are annuitzing your TDA funds and you also want to withdraw a portion of these funds, TRS must receive your TDA Withdrawal Application at least 65 days prior to the effective date of annuitization. For further information on additional forms you would need to file, please refer to the Your Tax-Deferred Annuity Program and the TDA Options at Retirement and TDA Deferral Status brochures.
TDA funds (except hardship withdrawals) would generally be distributed within 15 to 45 days after TRS receives your application. Hardship withdrawals would generally be distributed on the next available TRS payroll after TRS approves your application. All withdrawals will be paid to members by electronic deposit to a bank account; TRS will not issue checks for withdrawals. If you want to take a withdrawal, your bank account information must be on file with TRS. For in-service members paid on the Department of Education payroll, and retirees paid electronically, the bank information is already on file. Other members can provide their bank account information by submitting an online EFT Authorization Form. Please note that if you do not provide TRS with your bank account information within five business of submitting a withdrawal application, your application will be rejected.
Pre-1989 Funds: TDA contributions and earnings accumulated as of December 31, 1988.
Post-1988 Funds: TDA contributions and earnings accumulated after December 31, 1988.
Note: As a result of Internal Revenue Service (IRS) regulations governing Section 403(b) Programs, TDA participants are currently not permitted to move funds from TRS’ TDA Program to another Section 403(b) Program. On the advice of outside tax counsel, TRS has suspended all processing of requests to move TDA funds to another Section 403(b) Program pending further clarification from the IRS.
Withdrawal Type
Pre-1989 Funds Withdrawal: If you elect this option, you are indicating that you want to withdraw all of your Pre-1989 funds and have 100% of the distribution paid directly to you.
Partial Withdrawal: If you elect this option, you are indicating that you want to withdraw part of the balance of your TDA Program account and have 100% of the distribution paid directly to you. On the next page you will be able to select a dollar amount for the withdrawal. TRS will withhold 20% of the amount distributed and provide the IRS with information about this withholding. You may claim the amount withheld as tax paid on your tax return for the year of distribution.
Total Balance Withdrawal: If you elect this option, you are indicating that you want to withdraw the total balance of your TDA Program account and have 100% of the distribution paid directly to you. TRS will withhold 20% of the amount distributed and provide the IRS with information about this withholding. You may claim the amount withheld as tax paid on your tax return for the year of distribution.
Withdrawal in Conjunction With or After Separating from Service: If you are making a withdrawal in conjunction with your separation from service, you must submit the following to TRS:
- For teachers—An official resignation or termination notice supplied by the Department of Education (DOE).
- For all members working in Charter Schools—An official service history and resignation or termination notice supplied by your school’s business manager or Human Resources representative.
- For college personnel—An official service history and resignation or termination notice supplied by the college's Personnel Office.
- For paraprofessionals—An official resignation or termination notice supplied by your District Office, the DOE, or your payroll secretary.
Hardship Withdrawal: If you elect this option, you are indicating that you have a sudden and heavy financial need that you are unable to reasonably meet through other financial resources. Before filing this application, you must maximize all other available TRS and non-TRS resources. (See Hardship Withdrawal Eligibility Guidelines and Eligible Hardships and Required Documentation below.)
Withdrawal Restrictions
- In-service members who have not reached age 59½ may directly withdraw only their Pre-1989 funds.
- In-service members who have not reached age 59½ may directly withdraw their Post-1988 contributions (but not interest and/or investment return) only under the hardship provisions of the Internal Revenue Code.
Tax Consequences
- The taxable portion of any withdrawn TDA funds is taxable upon receipt and will be reported to the IRS in January following the calendar year in which it is distributed. For non-hardship withdrawals, the IRS requires that TRS withhold 20% of any taxable amount you withdraw. This 20% would be forwarded to the IRS and credited toward your taxes for the year of distribution.
- If you are on a leave of absence or separate from service through resignation or termination and withdraw all of your TDA funds while you have an outstanding TDA loan balance, your TDA loan would be closed; the outstanding balance would be deemed a distribution and reported to the IRS in January following the calendar year in which it is deemed a distribution.
- If a TDA loan is deemed a distribution in the same tax year in which you receive any TDA withdrawal, the IRS would require TRS to withhold 20% of the taxable portion of the deemed distribution from the withdrawal; this withholding would apply if your loan balance is deemed a distribution before your withdrawal is processed, and would be in addition to any withholding required separately for the withdrawal. The total amount withheld would be forwarded to the IRS and credited toward your taxes for the current year.
- If you are requesting a hardship withdrawal, you must select whether or not to have 10% withholding applied to your hardship withdrawal for crediting toward your federal income tax for the year in which you receive your hardship withdrawal. TRS would add a dollar amount equaling the 10% withholding to the total dollar amount that you receive as a hardship withdrawal, provided you have additional TDA funds available for hardship withdrawal. (Under both options, you are liable for any income tax that may be due on your hardship withdrawal, and you may be subject to tax penalties if your payments of estimated tax and withholding are not sufficient under the IRC.)
Note: If you elect to have a withholding amount applied to your hardship withdrawal, the withholding amount would be adjusted based on the payment amount that you receive. As a result, the estimated amounts indicated may not match the actual amounts of your hardship withdrawal.
All TDA withdrawals may be subject to an additional IRS-imposed 10% tax unless one of the following exceptions applies:
- The withdrawal is made in conjunction with your separation from service during or after the year in which you attain age 55; or
- The withdrawal is made during or after the year you reach age 59½; or
- The withdrawal is used to pay federally deductible medical expenses; or
- The withdrawal is made in conjunction with your disability retirement; or
- The withdrawal is made by your beneficiary in conjunction with a death benefit payment.
Hardship Withdrawal Eligibility Guidelines
Under the Internal Revenue Code (IRC), Tax-Deferred Annuity (TDA) Program participants who are under age 59½ may withdraw their post-1988 TDA contributions if they have a sudden and heavy financial need that they are unable to reasonably meet through other financial resources. If you meet those requirements, you may request a hardship withdrawal.
Before requesting a hardship withdrawal, you must maximize all other available TRS and non-TRS resources.
TRS resources include the following:
- Any pre-1989 TDA funds (i.e., the TDA contributions and earnings you accumulated as of December 31, 1988);
- Any excess Qualified Pension Plan (QPP) accumulations (Tier I and II members only); and
- Any available TDA and/or QPP loans.
Non-TRS resources include the following:
- Any available loans from the City of New York Deferred Compensation Plan (DCP);
- Any available loans against home equity and/or life insurance policies;
- Any commercial loans available on reasonable terms;
- Any available reimbursement or compensation from insurance and/or other sources; and
- Any reasonably available assets that can be liquidated without causing a sudden financial need.
You are responsible for the accuracy of your hardship claim. If your hardship withdrawal request is approved, you would also be responsible for paying any income taxes or penalty taxes that are due as a result of this withdrawal.
TRS suggests that you consult with your tax advisor should you have any specific tax questions.
Please note: TRS will determine if you have maximized all other available TRS resources. However, you are solely responsible for ensuring that you have maximized all available non-TRS resources prior to filing this application.
If you are approved for a hardship withdrawal, please note the following:
- TRS would calculate your hardship withdrawal amount based on the supporting documentation you submitted, funds in your TDA account available for hardship withdrawal, and funds available from other TRS resources. (Therefore, the amount of TDA funds you are eligible to withdraw under the IRC hardship provisions may differ from the amount you request on your hardship withdrawal application.)
- Your hardship withdrawal would be issued on the next available TRS payroll after the application is approved.
- This withdrawal would be drawn solely from contributions to the TDA Program made on or after January 1, 1989, excluding any investment return on these contributions. The withdrawal would be made from your balance in the Fixed Return Fund until depleted and then proportionally from your balances in the variable-return Passport Funds. The unit values used to value your withdrawal from the variable-return Passport Funds in dollars would be the unit values in effect for the month following the month in which TRS receives this application.
- Your TDA Program contributions, if any, would cease for a six-month period. You would be eligible to resume contributions when this period ends.
- Amounts distributed through a TDA hardship withdrawal are not eligible to be rolled over or transferred. Therefore, your withdrawal would be subject to federal income tax; state and local taxes may also apply.
Eligible Hardships and Required Documentation
The types of expenses that qualify for a TDA hardship withdrawal and the supporting documentation required are listed below. Please note that, if the documentation describes a hardship for a person other than yourself, you must also include proof of the other person's relationship to you (e.g., a 1040 form).
- Certain medical expenses for you, your spouse, a dependent, or child (including a child who does not qualify as a dependent for tax purposes) that are not covered by health insurance. Documentation: Physician, hospital, and/or related bills.
- Tuition, related educational fees, and related room and/or board expenses for post-secondary education for the next 12 months of education for you, your spouse, a dependent, or child (including a child who does not qualify as a dependent for tax purposes). Documentation: Outstanding itemized bill(s) (with name of student indicated) from the academic institution.
- Payment to prevent eviction from your principal residence or foreclosure on that residence. Documentation: Valid eviction or foreclosure notice (e.g., letter from landlord, attorney, or representative indicating amount due and date of pending eviction or foreclosure).
- Costs directly related to the purchase of your principal residence (excluding mortgage payments) and/or additional costs (e.g., legal and/or other closing fees) associated with this purchase. Documentation: Valid sales contract for purchase of principal residence and/or "good faith estimate" of any additional costs.
- Payment required for a new rental lease for your principal residence following eviction from a previous principal residence. Documentation: New valid lease.
- Payments for burial or funeral expenses for your spouse, parent, dependent, or child (including a child who does not qualify as a dependent for tax purposes). Documentation: Funeral home, cemetery, or related bills.
- Expenses for the repair of damage to your principal residence that would qualify for the casualty deduction under Section 165 of the IRC. Documentation: Photograph(s) of damage and licensed contractor’s estimate or bill(s) to repair the damage and/or letter from insurance company indicating the reimbursed expenses.