The Thrift Savings Plan annual addition limit

  • Published
  • By DFAS Military Pay Newletter
Service members who participate in the Thrift Savings Plan may be subject to the annual addition limit, which sets the most a member can contribute from tax-exempt pay earned in a combat zone.

The annual addition limit includes:

* Total contributions (both tax-deferred and tax-exempt) to the member's military TSP account, as well as the member's civilian TSP account if the member is also a civilian federal employee during the year.
* Civilian automatic (1 percent) TSP contributions for the year.
* Any matching contributions to civilian or military TSP accounts for the year.
* The annual addition limit does not include over-50 catch-up contributions.

The annual addition limit for 2008 is $46,000 (an increase from the 2007 $45,000 level), or 100 percent of compensation, whichever is less.

Note: For officers, tax-exempt contributions are those made from earnings in a combat zone up to the amount of the highest enlisted member's pay in the service, plus Imminent Danger/Hostile Fire pay if they are receiving it. If the monthly TSP contribution made while in a combat zone is higher than the tax-exempt pay limit, the amount above the limit will be tax-deferred.

For more information on TSP, go to www.tsp.gov .