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1. Why did I receive two Form 1099-R’s with different states listed in box 11? 
You received a Form 1099-R for each state that was your state of residence at the time a distribution was made to you. Although TSP does not withhold for state or local income tax, we do report, on IRS Form 1099-R, all TSP distributions to your state of residence at the time of the payment (if that state has an income tax). You may need to pay state and local income taxes on your payment. Your tax advisor or state or local taxing officials can explain any potential tax obligations.
2. I retired on disability. Why is my distribution considered an early withdrawal (code 1) on IRS Form 1099-R?
The Federal Retirement Thrift Investment Board has reviewed the IRS rules governing an exception to the early withdrawal penalty tax and has determined that the IRS criteria are more stringent than the criteria that OPM uses to approve a disability retirement. Consequently, the TSP will not report an early withdrawal made by a participant who has separated on an OPM-approved disability retirement as an exception to the IRS rules.
This means that early withdrawals made by participants who have separated on disability retirement will be reported in the same way as an early withdrawal made by other separated participants. Participants who have separated on disability retirement may or may not be entitled to an exemption from the early withdrawal penalty tax. However, the IRS (and not the TSP) will make this determination, and participants must make the claim for an exemption directly with the IRS. To do so, participants must file IRS Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, and any other evidence of disability required by the IRS. | 
Frequently Asked Questions