The Thrift Savings Plan has announced that TSP participants may now apply for the new temporary loan and withdrawal options available under the CARES Act.
Plan participants affected by the COVID-19 coronavirus can apply for a TSP general purpose loan with an increased maximum loan amount. These participants may also temporarily suspend payments on TSP loans they currently have and on loans taken between now and November 30, 2020.
The deadline for applying for a loan with an increased maximum is September 18, 2020. The deadline for requesting suspension of loan payments is November 30, 2020. Loan payment suspensions will last for the rest of calendar year 2020.
For participants who meet the criteria of the CARES Act, the total maximum loan amount for a general purpose loan is increased from $50,000 to $100,000, and the maximum portion of vested balance increased from 50% to 100%. The increased maximum loan amount is only available through September 22, 2020.
To qualify for one of the loan or withdrawal options, TSP participants must meet at least one of the following criteria:
- You have been diagnosed with the virus SARS–CoV–2 or with coronavirus disease 2019 (COVID–19) by a test approved by the Centers for Disease Control and Prevention.
- Your spouse or dependent (as defined in section 152 of the Internal Revenue Code of 1986) has been diagnosed with such virus or disease by such a test.
- You are experiencing adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary’s delegate).