Federal Worker Relief: Easier Access to Savings During Government Shutdowns
This act aims to ease financial burdens for federal employees during government shutdowns by allowing penalty-free withdrawals from their Thrift Savings Plan (TSP) and providing flexibility for TSP loans. It waives the 10% additional tax on certain early withdrawals and adjusts loan repayment rules, helping employees manage their finances during periods of unpaid leave or furlough.
Key points
No 10% additional tax on early TSP withdrawals up to $30,000 for federal employees affected by a government shutdown.
Federal employees can make multiple financial hardship withdrawals from TSP, up to $30,000, during a shutdown.
Missed TSP loan payments during a shutdown will not be treated as taxable distributions, with missed amounts deducted from future pay.
The $30,000 limit for withdrawals will be adjusted annually for inflation.
Status:
Introduced
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