Employees, who participate in the TSP during tax years 2002 through 2006, may be eligible for a tax credit of up to $2,000 on their Federal income tax return for each year they contribute to the plan. This "Saver's Tax Credit" is available to participants with adjusted gross income of no more than $50,000 who are married, filing jointly; $37,500 who are head of household; or $25,000 who are single or married, filing separately.

For more information about this new tax credit, please see IRS Publication 553 which outlines this and other changes to the tax laws.