What is a Roth TSA, and how is it different?
If permitted by your employer’s TSA program, you may designate your TSA contributions as Roth TSA contributions. Roth contributions and related earnings must be separately tracked. Unlike a traditional TSA contribution, a Roth TSA contribution comes out of your salary after taxes. This means that there is no reduction in your taxes on account of the contribution. However, a distribution of Roth TSA contributions and related earnings is completely free of federal income taxes if it is a qualified distribution. To be a qualified distribution, two conditions must be met. First, the distribution cannot be made during the five-year period that begins with the year of your first Roth TSA contribution to your employer’s TSA program (or to a prior program from which a rollover was made). Second, the distribution must be made after you reach age 59½, become disabled, or die. A Roth TSA is subject to the same distribution restrictions that apply to a traditional TSA. Until you reach age 59½, you
