Educate Yourself

PARTIAL LUMP-SUM OPTION PLAN (PLOP)

TAX IMPLICATIONS

A PLOP distribution is subject to federal income tax withholding. Since these payments have been identified as eligible rollover distributions, TRS must withhold 20 percent for income tax unless the eligible portion is rolled over into a qualified retirement plan. 

If you are less than 59 ½ years of age at the time of the PLOP election, an additional 10 percent penalty may be imposed by the Internal Revenue Service (IRS) and is due at the end of the tax year. To defer paying taxes on these payments, you may roll over all or a portion of the entire “eligible rollover distribution” amount to another qualified retirement plan. 

For additional information on taxes, please contact a tax consultant or the IRS at 800-829-1040. 

A PLOP is also subject to Georgia taxes for residents of Georgia.