§8440 — Title 5 Government Organization and Employees | U.S. Code

Summary

Under the Internal Revenue Code, the Thrift Savings Fund is treated like a tax‑exempt retirement trust under section 401(a) and 501(a). Money put into or taken out of the Fund is handled the same way as contributions and distributions for that kind of trust. Because of limits in section 401(k)(4)(B) and section 402(a)(8), an employee’s choice to have pay go into the Fund instead of getting cash does not count as the money being paid out. Even if other laws say different, the Fund does not have to follow the 401(k) nondiscrimination rules or the 401(m) matching rules so long as it meets this section’s requirements. Putting basic pay into the Fund still counts as “wages” for Social Security (section 209 of the Social Security Act) and FICA (section 3121(a) of the Internal Revenue Code).

Title 5, §8440

Government Organization and Employees — Source: USLM XML via OLRC

(a)For purposes of the Internal Revenue Code of 1986—

(1)the Thrift Savings Fund shall be treated as a trust described in section 401(a) of such Code which is exempt from taxation under section 501(a) of such Code;

(2)any contribution to, or distribution from, the Thrift Savings Fund shall be treated in the same manner as contributions to or distributions from such a trust; and

(3)subject to section 401(k)(4)(B) of such Code and any dollar limitation on the application of section 402(a)(8) of such Code, contributions to the Thrift Savings Fund shall not be treated as distributed or made available to an employee or Member nor as a contribution made to the Fund by an employee or Member merely because the employee or Member has, under the provisions of this subchapter and section 8351 of this title, an election whether the contribution will be made to the Thrift Savings Fund or received by the employee or Member in cash.

(b)Notwithstanding any other provision of law, the Thrift Savings Fund is not subject to the nondiscrimination requirements applicable to arrangements described in section 401(k) of title 26, United States Code, or to matching contributions (as described in section 401(m) of title 26, United States Code), so long as it meets the requirements of this section.

(c)Subsection (a) shall not be construed to provide that any amount of the employee’s or Member’s basic pay which is contributed to the Thrift Savings Fund shall not be included in the term “wages” for the purposes of section 209 of the Social Security Act or section 3121(a) of the Internal Revenue Code of 1986.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Internal Revenue Code of 1986, referred to in subsecs. (a) and (c), is classified generally to Title 26, Internal Revenue Code. section 209 of the Social Security Act, referred to in subsec. (c), is classified to section 409 of Title 42, The Public Health and Welfare.

Amendments

1994—Subsecs. (a), (c). Pub. L. 103–353 substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”. 1992—Subsec. (a)(3). Pub. L. 102–378 inserted “section 401(k)(4)(B) of such Code and” after “subject to”. 1988—Subsec. (a)(3). Pub. L. 100–647, which directed the insertion of “, 401(k)(4)(B) of such Code,” after “subsection (b)”, could not be executed because of previous amendment by Pub. L. 100–202, § 101(m) [title VI, § 624(b)(1)] which struck out “subsection (b)”. See 1987 Amendment note below. 1987—Subsec. (a)(3). Pub. L. 100–202, § 101(m) [title VI, § 624(b)(1)], struck out “the provisions of subsection (b) and” after “subject to”. Subsec. (b). Pub. L. 100–202, § 101(m) [title VI, § 624(b)(2)], added subsec. (b) and struck out former subsec. (b) which consisted of pars. (1) and (2) providing that subsec. (a)(3) not apply to the Thrift Savings Fund unless the Fund meets the antidiscrimination requirements applicable to arrangements described in section 401(k) of title 26 and to matching contributions.

Statutory Notes and Related Subsidiaries

Effective Date

of 1994 AmendmentAmendment by Pub. L. 103–353 effective with respect to reemployments initiated on or after the first day after the 60-day period beginning Oct. 13, 1994, with transition rules, see section 8 of Pub. L. 103–353, set out as an

Effective Date

note under section 4301 of Title 38, Veterans’ Benefits.

Effective Date

of 1992 AmendmentAmendment by Pub. L. 102–378 effective Nov. 10, 1988, see section 9(b)(8) of Pub. L. 102–378, set out as a note under section 6303 of this title.

Effective Date

of 1988 AmendmentAmendment by Pub. L. 100–647 effective as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of Title 26, Internal Revenue Code.

§8440 Tax Treatment of the Thrift Savings Fund

Summary

Title 5, §8440

Notes & Related Subsidiaries

Editorial Notes

References in Text

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Effective Date

Effective Date

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