Hardship Withdrawals are taxable distributions.

You can elect to have 10% withheld from the taxable portion of your withdrawal and applied to your federal taxes for the year of distribution, or choose no withholding. 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 Internal Revenue Code.

Your hardship withdrawal, if approved, would be a taxable distribution and would be reported to the Internal Revenue Service (IRS) in January following the calendar year in which it is distributed. For Roth hardship withdrawals, federal tax withholding applies only to the taxable portion of the withdrawal.

Since TDA and Roth hardship withdrawals are not eligible to be rolled over or transferred, your withdrawal would be subject to federal income tax; state and local taxes may also apply.

If a TDA loan is deemed a distribution in the same tax year in which you receive a TDA hardship withdrawal, the IRS would require TRS to withhold 20% of the taxable portion of the deemed distribution from the hardship withdrawal; this withholding would apply if your loan balance is deemed a distribution before your hardship withdrawal is processed, and would be in addition to any withholding required separately for the hardship withdrawal. The total amount withheld would be forwarded to the IRS and credited toward your taxes for the current year.

If you elect to have a withholding amount applied to your hardship withdrawal, the withholding amount would be adjusted based on the payment amount you receive. As a result, the estimated amounts indicated may not match the actual amounts of your hardship withdrawal.