Are G Fund Distributions State Taxable?

[baxter]

I am a CSRS retiree. All of my TSP contributions were into the G Fund. I began to take distributions from my G Fund in 2012. The state I live in (Montana) does have an income tax and does not exempt Civil Service Pensions. My question is this: Since my TSP distributions come from a fund based entirely on U.S. Gov't bonds, are the distributions still subject to state income tax? Thanks!

 

[Birchtree]

Yes fully taxable - but think of it this way - you are paying for food stamps you're not using.

 

[baxter]

Yes fully taxable - but think of it this way - you are paying for food stamps you're not using.

I suspect you are right but I sure would not mind hearing from others on this.

 

[k0nkuzh0n]

I suspect you are right but I sure would not mind hearing from others on this.

The fund that the money was in is irrelevent. The money in TSP was tax deferred so yes whenever you withdraw funds, you will have to pay income tax on it.

 

[Birchtree]

Any income that produces a 1099 form is taxable - and there ain't no place to hide these days. The IRS knows everything about your income.

 

[Frixxxx]

I am a CSRS retiree. All of my TSP contributions were into the G Fund. I began to take distributions from my G Fund in 2012. The state I live in (Montana) does have an income tax and does not exempt Civil Service Pensions. My question is this: Since my TSP distributions come from a fund based entirely on U.S. Gov't bonds, are the distributions still subject to state income tax? Thanks!

You're TSP payouts are subject to taxation. The TSP is considered an investment and is available for taxation by all states. Even though it invests in U.S Treasuries, it doesn't count toward actually buying them yourself.