Thrift Savings Plan Emergency Withdrawal Act of 2025

HR 6929, the Thrift Savings Plan Emergency Withdrawal Act of 2025, allows federal employees who have separated from civil service but haven't yet received their annuity payments to withdraw funds from their Thrift Savings Plan (TSP) without the usual 10% early withdrawal penalty. It permits these withdrawals to be taxed ratably over three years instead of all at once, with a lifetime limit of $100,000 per individual. Withdrawn funds can be repaid within one year by rolling them into another eligible retirement plan, with contributions treated as direct trustee transfers. The bill applies to distributions made after January 20, 2025, and specifically affects federal employees in the transition period between separation and annuity receipt.