Roth TSP contributions for active duty may stop unless changes made Published Dec. 8, 2014 By Abigail C. Reid Federal Retirement Thrift Investment Board MALMSTROM AIR FORCE BASE, Mont. -- Active-duty members of the Army, Air Force or Navy making dollar-amount Roth contributions to their Thrift Saving Plan account will need to act before these deductions stop Jan. 31, 2015. An upcoming change in myPay will require service members to designate Roth contributions as a percentage of their pay, not a dollar amount. Noncompliance with this change means the Defense Finance and Accounting Service (DFAS) will not be able to process Roth contributions. This change affects Roth contributions only; traditional contributions are already designated as a percentage of pay. The new requirement will take effect Jan. 1, 2015. Service members will have 30 days to change their Roth election from a dollar amount to a percentage of their pay. If a new Roth election is not received by Jan. 31, 2015, DFAS will not be able to process Roth contributions until they are updated. To make the change, log into myPay and click on the special TSP section called "Traditional TSP and Roth TSP." Then, in the "Contribution from Roth TSP" section, enter the percentage of pay to contribute (10 percent, for example). Finally, click "Save" at the bottom of the screen. When individuals make Roth contributions, they pay taxes on the money they save before it goes into their TSP account. So individuals pay no income taxes when they take it out, and their earnings can also be tax-free if they have reached age 59.5 or have a permanent disability and five years have passed since the year of their first Roth contribution. Service members can make Roth contributions from tax-exempt pay, basic pay, incentive pay, special pay and bonus pay. Roth contributions made from tax-exempt pay earned in a combat zone will not be taxed upon contribution and will grow tax-free.