Bills · HR 5690
IN COMMITTEE· 119TH CONGRESS
House BillHR 5690Taxation
Emergency Relief for Federal Contractors Act of 2025
INTRO OCT 3· LAST ACTION OCT 3
READING
6MIN
COSPONSORS
10
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenVoters should care about this bill because federal government shutdowns, while impacting federal employees directly, also cause significant financial distress for a broader group of workers, including federal contractors and those whose jobs are tied to federal funding. These individuals often do not receive back pay after a shutdown ends, unlike many direct federal employees, making the financial impact more severe and lasting.
If this bill becomes law, it would provide a crucial financial lifeline, allowing affected individuals to pay for essential expenses like rent, food, and utilities without having to incur a tax penalty for touching their retirement savings early. This helps protect their long-term financial security by offering a way to replenish their retirement funds once their pay resumes. If it doesn't become law, these workers would continue to face the difficult choice of enduring financial hardship or sacrificing a portion of their retirement savings through a penalty during future shutdowns.
KEY PROVISIONS
4AI-extractedPROVISION 01
Allows individuals affected by a federal government shutdown to withdraw up to $30,000 per year from their retirement accounts without paying the usual 10% early withdrawal penalty.
This directly provides financial relief by removing a significant tax burden during a period of lost income.
PROVISION 02
Gives individuals a three-year window to repay the withdrawn funds back into an eligible retirement plan, treating the repayment as a tax-free rollover.
This protects long-term retirement savings by allowing people to restore their funds without tax implications once their financial situation stabilizes.
PROVISION 03
Permits individuals to spread the income tax liability on these withdrawals over a three-year period if they choose not to repay the funds.
This eases the immediate tax burden, making it more manageable for individuals facing financial stress.
PROVISION 04
Defines 'applicable individual' to include federal contractors, employees of federal grantees or states whose pay is federally tied, and specific D.C. government employees affected by a shutdown.
This clarifies precisely who is eligible for this emergency financial relief.
SPONSORSHIP
1 + 10
D· Virginia
YRS IN OFFICE
1
BILLS LED
44
COSPONSOR BREAKDOWNBIPARTISAN · 0%
DEM 10 REP 0 IND 0
ACTION TIMELINE
2 EVENTSOCT 3
Introduced in House
OCT 3
Referred to the House Committee on Ways and Means.
BILL INFO
TypeHouse Bill
NumberHR 5690
Congress119th
StatusIn Committee
IntroducedOct 3, 2025
Last actionOct 3, 2025
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IN COMMITTEE· 119TH CONGRESS · WAYS AND MEANS COMMITTEE · INTRODUCED OCT 3, 2025
House BillHR 5690Taxation
Emergency Relief for Federal Contractors Act of 2025
INTRODUCED OCT 3, 2025· LAST ACTION OCT 3, 2025
PASSAGE CHANCES
—%
READING
6 min
COSPONSORS
10
COMPLEXITY
Moderate
