P 051541Z FEB 16
FM DFAS CLEVELAND OH
TO AIG 4730//
AIG 4676//
AIG 4678//
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UNCLAS
SUBJ/NEW DEFENSE JOINT MILITARY PAY SYSTEM ACTIVE COMPONENT (DJMS-AC)
PROCEDURES FOR PROCESSING COMBAT ZONE TAX EXCLUSION (CZTE) TRANSACTIONS
FOR MEMBERS WHO MAY HAVE A TRADITIONAL THRIFT SAVINGS PLAN (TSP)
ELECTION//
MILITARY PAY ADVISORY 02/16//
POC/BARBARA BLOCK/CODE JFLQ/TEL: 216-204-4308//
RMKS/1. THIS MILITARY PAY ADVISORY PROVIDES PROCEDURES FOR PROCESSING
CZTE TRANSACTIONS FOR MEMBERS WHO MAY HAVE A TRADITIONAL TSP ELECTION.
2. IT IS IMPORTANT THAT A MEMBERS' CZTE STATUS BE PROCESSED AS SOON AS
POSSIBLE AFTER THE STATUS BEGINS. A START TRANSACTION SHOULD BE USED
RATHER THAN WAITING TO DO A REPORT TRANSACTION.
3. THIS WILL IMPROVE THE MEMBERS' ABILITY TO CONTRIBUTE EXEMPT TSP
CONTRIBUTIONS UP TO THE INTERNAL REVENUE CODE (IRC) SECTION 415(C)
LIMIT WHICH IS $53000.00 FOR TAX YEAR 2016. IF THE MEMBER HAS
TRADITIONAL TSP CONTRIBUTIONS DEDUCTED IN A COMBAT ZONE BUT BEFORE
THE CZTE STATUS HAS BEEN REPORTED, THE MEMBER MAY ONLY BE ABLE TO
CONTRIBUTE UP TO THE IRC 402(G) DEFERRAL LIMIT OF $18000.00 AND NOT THE
IRC 415(C) LIMIT OF $53000.00.
4. IF CONTRIBUTIONS ARE MISSED DUE TO THE LATE POSTING OF CZTE, THEY
CANNOT BE MADE UP LATER WHILE NOT IN A CZTE STATUS.
5. A STOP TRANSACTION FOR CZTE SHOULD ALSO BE PROCESSED TIMELY TO
AVOID THE NEED TO REFUND OR RECHARACTERIZE TSP CONTRIBUTIONS.
6. REQUEST WIDEST DISSEMINATION POSSIBLE.//