TSP Installment payment withholding error - HELP!

[Rcf3]

Hello,

Over the last couple of days I’ve been trying to apply online for TSP installment payments for the first time. When I reach the federal tax withholding page in order to elect 20% withholding status I have been told by the TSP reps that I must select the fourth tab, withholding based on my martial status with an additional dollar amount. I have been advised to input married with 3 which would result in no tax being withheld, and then add the dollar amount representing the 20% I want withheld. When I do this an error message appears stating that “Your withholding amount must not exceed the amount of this payment”.

I called TSP and they advised me to clear my cache and cookies. That didn’t work. They had me enter different dollar amounts in the additional withholding box but everything above $20 resulted in the above error message. After they satisfied themselves that the amounts I was entering for the installment payments and 20% withholding are correct I was told that they believe the issue may be caused by the fact the IRS has not yet provided next year’s tax information and the TSP “wizard” may not allow this transaction until February 1. They asked me to wait a few weeks and try again.

This doesn’t seem right. Has anyone encountered this error?

 

[Scout333]

Rcf3, when I retired no withholding was allowed so I increased Tax withholding on my civil service check to cover taxes on my TSP withdrawal. That is one option. You could just wait till 2-1-2022 and adjust the remaining 11 month's withholding amounts to cover the taxes estimated for the full year's TSP withdrawals. i.e. increase remaining amounts to cover. Option one worked fine for me. Still using the same process seven years later. Good luck in getting the TSP to fix your problem! Workarounds are your friend. Good luck!

 

[exnavyew]

A: would suggest keep trying TSP reps. Some reps are more knowledgeable than others.
B: another option would be to contact the Federal Retirement Thrift Investment Board,
for assistance as they administer TSP although my guess is that they would refer you
back to TSP itself.
https://www.frtib.gov/contacts.html

this might be of help:
https://www.tsp.gov/living-in-retirement/changing-your-withdrawal-request/

Good luck! :smile:

 

[Globalpack]

Have you considered withholding your own taxes yourself? I LOVED the option for no withholding and since then every payment I put taxes in a separate savings account and make periodic payments at the PAY1040 website to avoid penalties.

 

[Boghie]

Since the specific dollar amount withholding option doesn't work, perhaps:

1. Initiate withholdings based on 0 deductions.
2. If that is withholding more than the 20% change to 1 deduction,
3. Rinse and Repeat till you get to near the 20% tax desired.

That way you will likely withhold a little more than 20% over the year - because of the first few months being over-withheld.

Anyway, you are just wasting time with the helpdesk. If their program isn't working it won't work. And, the 'wait till next month' comment was just to get you off the phone. They cannot do anything as evidenced by them asking you to clear the cache.

Anyway, where did the 20% withholding ratio come from? If I were you I would either have my tax dude(tte) figure out what my taxes will be for 2022 or just plunk the numbers into TurboTax (or whatever) and get a real number. Since 2017 Federal taxes have been a simple process. It is almost a flat tax now. You really don't have to guess. GlobalPack's idea is probably the route I will take, but we all have our own preferences.

 

[evilanne]

Rcf3,
When I set up installment payments it was all done by paper & faxed in...not sure if that is still an option or not but it took me several times to find someone answering the phone to get the correct answer on withholding. Their directions are totally messed up in advising everyone to select married with 3 dependents as it should be your actual filing status.

TSP doesn't actually calculate the withholding amount. I believe it goes to Department of Treasury to do the withholding calculation.
This may be why they can't answer your question https://www.irs.gov/individuals/tax-withholding-estimator

Service Outage
This service will be unavailable from December 30, 2021, until late January 2022 for planned maintenance. Thank you for your patience.

You can use the appropriate worksheet 1-4 at https://www.irs.gov/pub/irs-pdf/p505.pdf based on you filing status to estimate how much they will withhold. You can adjust the brackets to the 2022 figures if you wish to be more precise. Subtract your estimated calculated amount from your calculated 20% figure to determine how much additional withholdings you need and divide by the number of payments (12 monthly; 4 quarterly). If you are doing life expectancy payments you may want to add a few dollars so you don't have to deal with TSP again next year. I agree with Scout...it is easier to adjust your OPM tax withholdings.

 

[Rcf3]

Thank you for all the replies. To say that the TSP website is a little glitchy is a huge understatement. After dozens of attempts to enter the withholding amount I want for the installment payments I finally decided to select no withholding and change the amount after processing. I printed the prefilled TSP-99 so I could have it notarized and then submit it by uploading it to the website. Despite the fact that my scanned form met all the requirements for the upload the form was rejected numerous times. I ultimately had to snail mail the form.

The TSP is definitely a government operation! Dealing with the disfunction reminded me of the IT systems back at my old job!

 

[Tsunami]

The TSP is such a nightmare to work with, but that's a new one (having your online submittal of the form to change your installment payments rejected). I haven't had that happen (yet).

I second the prior suggestions to simply have zero taxes taken out of your TSP monthly payments, then just adjust the tax withheld from your OPM annuity as needed. That's easier to do (no silly notarized forms etc.), though my wife and I both just experienced a glitch with that too when in early December we both changed our withholding amount for our January 1st annuity payments, and the new amount shown online was correct, but then OPM got the amount wrong... the amount withheld was a few dollars less than what we'd changed it to for BOTH of our annuities. Now I see that the statement is online for the 2/1 payment, and it's going to be correct next time, I hope. It's so aggravating that these simple things get messed up. In the case of the OPM error, I tried calling...gave up after 45 minutes...sent them an email, and it's now been 4 weeks and they never replied...and also submitted a question via their online "contact us" link...a month later, no reply!

I also have a small business that I pay federal estimated taxes on, so I can make adjustments that way with the quarterly estimated payments.

 

[Rcf3]

The TSP is such a nightmare to work with, but that's a new one (having your online submittal of the form to change your installment payments rejected). I haven't had that happen (yet).

I second the prior suggestions to simply have zero taxes taken out of your TSP monthly payments, then just adjust the tax withheld from your OPM annuity as needed. That's easier to do (no silly notarized forms etc.), though my wife and I both just experienced a glitch with that too when in early December we both changed our withholding amount for our January 1st annuity payments, and the new amount shown online was correct, but then OPM got the amount wrong... the amount withheld was a few dollars less than what we'd changed it to for BOTH of our annuities. Now I see that the statement is online for the 2/1 payment, and it's going to be correct next time, I hope. It's so aggravating that these simple things get messed up. In the case of the OPM error, I tried calling...gave up after 45 minutes...sent them an email, and it's now been 4 weeks and they never replied...and also submitted a question via their online "contact us" link...a month later, no reply!

I also have a small business that I pay federal estimated taxes on, so I can make adjustments that way with the quarterly estimated payments.

RE the withholding, that’s exactly what I’m going to do.

RE the TSP site upload rejection, I was told by their rep to scan my form into PDF format in black and white at 300 dpi+. I scanned at 600 dpi and the site rejected it as not readable. Nonsense, but I’m starting to see the quirks in the system. I’ve been retired for five years and had yet to deal with the TSP, but my wife just retired and we want to withdraw some small monthly installments so we can use the money to travel. Who knew it would be so frustrating?

 

[DreamboatAnnie]

I had recent issue with form upload not being processed, and error msg said it was not readable. I read fine print on their site (was at end of long set of instructions) and found that fir upload document must be black and white and high quality.

So to ensure "high quality" and "clear and readable", custom set your scanner to the highest dpi (I used 1200 x 1200 dpi) for documents, scanned into single document, and then confirmed overall file size met the maximum. I think it was 20M limit. If just a few pages, it should come nowhere near the per document limit. At this dpi level, it accepted my two-page, single file upload.

 

[Rcf3]

I had recent issue with form upload not being processed, and error msg said it was not readable. I read fine print on their site (was at end of long set of instructions) and found that fir upload document must be black and white and high quality.

So to ensure "high quality" and "clear and readable", custom set your scanner to the highest dpi (I used 1200 x 1200 dpi) for documents, scanned into single document, and then confirmed overall file size met the maximum. I think it was 20M limit. If just a few pages, it should come nowhere near the per document limit. At this dpi level, it accepted my two-page, single file upload.

So the TSP upload instructions state they want 300dpi, won’t accept my 600dpi, and ultimately accepts your 1200dpi. Like I said, typical government operation

 

[Boghie]

ANY time you 'upload' a form (PDF, Word, Spreadsheet, whatever) to an 'automated' system implies the process is an analog one in a digital world.

They have some stupid OCR garbage 'reading' your form and dumping what it thinks it is reading into a database field. You DO NOT want to have that done. Have you had to do that with your bank, with Amazon, or even your favorite 'adult' site. Nope. Just bozo gubmint sites.

My suggestion is to just muck with the withholding numbers till you get what you want. If you actually type a value into a screen field it will be saved as that value into the database. Nothing/Nobody is attempting to read a number off a picture - which is really what your form is.

 

[DreamboatAnnie]

So the TSP upload instructions state they want 300dpi, won’t accept my 600dpi, and ultimately accepts your 1200dpi. Like I said, typical government operation ��

I dunno... In my "deep dig" I never saw a specified dpi, so maybe I am looking at something different, but I was on TSP site and had to upload document about 3 weeks ago. I was about to give up but figured that unreadable might mean quality if scan was not high enough for them. Somehow it worked! :dunno:

 

[Rcf3]

I dunno... In my "deep dig" I never saw a specified dpi, so maybe I am looking at something different, but I was on TSP site and had to upload document about 3 weeks ago. I was about to give up but figured that unreadable might mean quality if scan was not high enough for them. Somehow it worked! :dunno:

It’s there. I was also told personally by their rep that it had to be at least 300dpi. Famous last words, “I’m from the government and I’m here to help”. Lol.

 

[Rcf3]

ANY time you 'upload' a form (PDF, Word, Spreadsheet, whatever) to an 'automated' system implies the process is an analog one in a digital world.

They have some stupid OCR garbage 'reading' your form and dumping what it thinks it is reading into a database field. You DO NOT want to have that done. Have you had to do that with your bank, with Amazon, or even your favorite 'adult' site. Nope. Just bozo gubmint sites.

My suggestion is to just muck with the withholding numbers till you get what you want. If you actually type a value into a screen field it will be saved as that value into the database. Nothing/Nobody is attempting to read a number off a picture - which is really what your form is.

The saga continues in my plight to submit my TSP-99. If you will recall, this thing began with the TSP site not allowing me to select an additional amount of federal tax withholding and furthermore rejecting the upload of my form despite the fact it met all the requirements. I was told by two TSP representatives that they had been having trouble with the uploads so I put the form in the regular mail. Two days later I decided to call the TSP to find out about the process going forward. It was at that point that I was told the form that I had created online had been canceled and therefore the form in the mail would be rejected. I was told that I must have inadvertently canceled the form. I didn’t, but whatever! I was now advised I needed to create a second form online, have it notarized again, and this time it was suggested that I fax the form due to the ongoing upload issues. I did just that and the next day I called to determine if the fax had been received. I was told that only two of the three relevant pages had been received so the form had been rejected. I would have to fax the form again. This time the TSP representative I spoke to seemed completely surprised to learn that the upload capability had been glitchy of late. This despite the fact two of her predecessors had told me it was a well-known problem. I have now faxed the form again. This makes the third time in a week that I have attempted to submit the TSP-99. I have my fingers crossed but I’m not getting my hopes up! If this latest fax goes wrong I may fly to Birmingham and hand them the form myself!

 

[tsptalk]

I guess they want you to keep your money where it is. :notrust:

 

[evilanne]

LOL:lmao:

Brings back memories...I think one of my forms. was rejected because of the date and an extraneous mark from the pen (be careful of what type of pen you use on the form) not being readable on the notarized form...but back then we didn't have upload option. They don't call you when they reject. it either, they send you a letter. You have to keep calling them daily to make sure it gets processed.

Tom may be right about them intentionally making it difficult to withdraw anything from TSP

Make sure your withholding amount is enough to cover you for a while or plan on using another method to pay taxes so you don't have to go through this again any time soon!

Not looking forward to calling them about the change in life expectancy table. Wish me luck.

 

[Rcf3]

I guess they want you to keep your money where it is. :notrust:

Right? By the way, one more for the books. When I spoke to the rep yesterday I mentioned that is was my understanding that once the TSP-99 was finally received I would be getting a text confirming that fact, at least so I had been told by another rep. She told me I had been misinformed because the confirmation would appear on the website message center. This morning… you guessed it… I received a text. There are no messages in the message center. Calling the TSP is like asking two lawyers a question… you will get four opinions!

in any case, it looks like my request has finally been accepted and it is being processed. It only took three attempts, five phone calls, several hours on the website, and two different notarizations. My wife has her 401(k) with a private company and dealing with them is a pleasure. Smooth as can be. Sheesh!

 

[tsptalk]

Crazy! Thanks for the follow up.

 

[Rcf3]

Crazy! Thanks for the follow up.

I think the issues are caused by the ridiculous rule that married people must have their spouse sign the form and have it notarized. Few private companies require this despite the existence of beneficiaries. There is a point in the online request where TSP will not allow direct online submission for those who fit these circumstances. The form must be printed, notarized, and then submitted via upload, fax, or mail. That’s where the fun’s begins!

You guys should do a sticky thread with information about dealing with different TSP issues after separation. Whoever said that getting accurate information when you call TSP is a roll of the dice couldn’t have been more correct. Additionally, the website is glitchy as can be. I wish I would have known the following when first attempting to submit the TSP-99 form:

1. Create the form online
2. If it doesn’t allow you to elect your desired withholding status select no withholding and adjust it after the form is processed, or better yet increase the withholding of your OPM annuity to compensate for no withholding by the TSP.
3. Print the form.
4. DO NOT go back into the the page of the website where you create the form because you can easily cancel it inadvertently and the paper version will be rejected by the TSP.
5. Have the form notarized.
6. Forget uploading the form, as of this writing the site will reject it 99% of the time.
7. Fax the form to the TSP. If you don’t own a fax machine you can easily scan the form with your cellphone and download a fax app to get the job done.
8. Definitely follow up with a phone call the next day to make sure your form was accepted.