There are changes made in the limitation of the IRS. Therefore, it has become mandatory to contribute annually to the Thrift Savings Plan (TSP). Therefore, the amount has been increased for the coming year, 2023. It is considered to be elective deferrals. The employees are now recommended to add $22,500 as IRS elective deferral. Other than that, employees who are gaining have an additional option. Thus, they can add up to $7500 if their limit has been fulfilled. It is for safety and will become beneficial in the coming days. The TSP has made alterations in the way payments used to be elected. The change might have become easy for many. It included the employees who were turning 50. They would not have to add any yearly payment to the TSP account.
Moreover, the employees who are eligible for the contributions can set one rate for contribution. When they reach the level after every year, the TSP will automatically start having their contributions for the year as catch-up contributions. The employees would not have to do it manually. Also, only the fixed amount would be cutâ€”no more or less of that.
The election will carry out in the same way as it is supposed to be. It will only change once you request a new one. You do not have to worry about the agencies that have been matching funds and are getting suspended since you have reached the maximum level of your contributions before the year ends. Moreover, the employees whose contributions are way higher than others and are over the limit will continue to get 5% matching contributions of their current salary.
Furthermore, employees can start, stop or change the catch-up contributions at any time. They can do it using MYEPP. If you choose not to contribute to the catch-up limit, you must adjust your TSP contributions accordingly. Other than that, there will be 26 paychecks reported for 2023, Wage and Tax Statement (W-2). The TSP contributions for the 2022 25 pay period will be counted as IRS elective deferral limit. TSP contributions for pay period 26, 2022, and the year 2023, the pay period of 25, will be reported on the W-2, 2023. Lastly, the employees who wish to make maximum contributions should consider paying on payday bases. For instance, they would have to make a daily payment of $866 if they have a payday of 25, 2022. Employees wishing to contribute the maximum level of money, which includes the contribution for 2023 in equal installments, should choose to contribute $1,154 every work day of the year if they have a pay period of 26.
To know more about TSP, you should look at the website. You will find procedures and methods for making contributions for the pay period on the site.
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