Bills · HR 6929
IN COMMITTEE· 119TH CONGRESS
House BillHR 6929Taxation
Thrift Savings Plan Emergency Withdrawal Act of 2025
INTRO DEC 23· LAST ACTION DEC 23
READING
3MIN
COSPONSORS
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- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenThis bill matters because it offers a safety net for federal employees transitioning out of government service, a period that can often bring financial uncertainty. Currently, accessing retirement savings early comes with a significant penalty, which can discourage people from using their own money even in dire situations. By removing the 10% penalty and allowing the income tax to be spread over three years, the bill provides greater flexibility and financial relief during a crucial time.
If this becomes law, separated federal employees could tap into their TSPs for emergencies, unexpected expenses, or to bridge income gaps without the added tax burden. If it doesn't pass, these individuals would continue to face the 10% early withdrawal penalty and immediate tax liability on any early withdrawals, potentially forcing them into more difficult financial decisions or deeper debt during their transition.
KEY PROVISIONS
5AI-extractedPROVISION 01
Allows federal employees separated from service to make penalty-free withdrawals from their Thrift Savings Plans (TSPs).
This removes the standard 10% early withdrawal penalty for certain individuals, providing easier access to retirement funds in times of need.
PROVISION 02
Permits individuals to include the withdrawn amount in their gross income over a three-year period, unless they choose otherwise.
This provision helps spread out the tax burden, potentially reducing the immediate impact on annual income taxes.
PROVISION 03
Sets a maximum limit of $100,000 for these special tax-favored withdrawals.
This caps the amount that can receive preferential tax treatment, balancing financial relief with the goal of preserving retirement savings.
PROVISION 04
Allows individuals to repay the withdrawn amount into an eligible retirement plan within three years, treating it like a direct rollover.
This provides flexibility, allowing individuals to restore their retirement savings without tax consequences if their financial situation improves.
PROVISION 05
Defines 'qualified civil service separation distribution' as distributions made from a TSP during a specific period after electing an annuity and before receiving the first finalized annuity payment.
This clearly defines who qualifies for these benefits and during what timeframe, focusing on the transitional period for separated federal employees.
SPONSORSHIP
1 + 0
D· District of Columbia
YRS IN OFFICE
35
BILLS LED
114
ACTION TIMELINE
2 EVENTSDEC 23
Introduced in House
DEC 23
Referred to the House Committee on Ways and Means.
BILL INFO
TypeHouse Bill
NumberHR 6929
Congress119th
StatusIn Committee
IntroducedDec 23, 2025
Last actionDec 23, 2025
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IN COMMITTEE· 119TH CONGRESS · WAYS AND MEANS COMMITTEE · INTRODUCED DEC 23, 2025
House BillHR 6929Taxation
Thrift Savings Plan Emergency Withdrawal Act of 2025
INTRODUCED DEC 23, 2025· LAST ACTION DEC 23, 2025
PASSAGE CHANCES
—%
READING
3 min
COSPONSORS
0
COMPLEXITY
Moderate
