5 CFR § 1600.35 - Refunds of default employee contributions.
(a) Subject to the limitations in paragraph (f) of this section, a participant may request a refund of any default employee contributions made on his or her behalf (i.e., the contributions made while under the automatic enrollment program) provided the request is received within 90 days after the date that the first default employee contribution was processed. The election may be made on the TSP website or by completing the TSP's refund request form and must be received by the TSP's record keeper prior to the expiration of the 90-day period.
(1) The distribution of a refund will be reported as income to the participant on IRS Form 1099–R, but it will not be subject to the additional tax under 26 U.S.C. 72(t) (the early withdrawal penalty tax).
(2) A participant who requests a refund will receive the amount of any default employee contributions (adjusted for allocable gains and losses).
(3) Processing of refunds will be subject to the rules set out at 5 CFR part 1650.
(b) A participant will no longer be considered to be covered by the automatic enrollment program if the participant files a contribution election. Consequently, if a participant makes a contribution election during the 90-day period, the participant will only be eligible to receive as a refund an amount equal to his or her default employee contributions (adjusted for allocable gains and losses).