Emergency Relief for Federal Workers Act of 2025

Tax Penalty Waiver: The bill waives the 10-percent additional tax on certain financial hardship distributions from the Thrift Savings Plan for Federal employees affected by a qualified lapse in appropriations (Section 2).

Hardship Withdrawals: The Board is permitted to allow employees on furlough or working without pay to make withdrawals based on financial hardship, provided they occur during the qualified lapse in appropriations and do not exceed $30,000 (Section 3).

Ability to Replenish Savings: Employees who make covered hardship or age-based withdrawals can make contributions back to the Thrift Savings Fund to recoup their savings, up to the amount withdrawn or $30,000 (Section 3).

Loan Access: The Board is required to prescribe rules that allow loans to be made to employees who are furloughed or working without pay due to a lapse in appropriations (Section 3).

Protection of Missed Loan Payments: Missed loan payments due to a shutdown will not be treated as a taxable distribution (Section 4).

Withdrawal Limits: The relief regarding distributions and hardship withdrawals is limited to an aggregate amount that does not exceed $30,000 per qualified lapse in appropriations (Section 2 and Section 3).

Loan Repayment Burden: While employees can take loans, the rules provide that the full amount of outstanding payments missed because of a shutdown shall be deducted and withheld from the employee's pay once the qualified lapse in appropriations has passed (Section 3).