Penalty-Free Retirement Withdrawals for Workers Affected by Government Shutdowns.
This bill allows federal contractors and employees who lose income due to a government shutdown (lasting at least two weeks) to withdraw up to $30,000 from their retirement accounts. These withdrawals are exempt from the standard 10% early withdrawal penalty. Individuals have the option to repay the funds within three years to avoid income taxation, or they can spread the tax liability over three years.
Key points
Allows penalty-free withdrawal of up to $30,000 annually from retirement savings if income is lost due to a federal shutdown.
Eligibility covers federal contractors, their employees, and certain state/D.C. employees affected by a funding lapse of two weeks or more.
You have three years to repay the withdrawn amount back into the retirement account, effectively reversing the tax consequences.
Introduced
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