Federal Worker Relief: Waiving Penalties for Thrift Savings Plan Withdrawals
This act aims to protect federal employees affected by government shutdowns. It allows them to withdraw up to $30,000 from their Thrift Savings Plan (TSP) without the usual 10% early withdrawal tax penalty. Additionally, the act simplifies TSP loan access and prevents missed loan payments during a shutdown from being treated as taxable distributions.
Key points
No 10% tax penalty on withdrawals up to $30,000 from TSP for federal employees during a government shutdown.
Allows multiple financial hardship withdrawals from TSP during a shutdown, up to the $30,000 limit.
Ability to repay withdrawn funds within 120 days after a shutdown, treating them as a tax-free rollover.
Facilitates access to TSP loans for employees affected by government shutdowns.
Missed TSP loan payments during a qualified shutdown will not be treated as a taxable distribution.
Status:
Introduced
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