I 
119TH CONGRESS 
1ST SESSION H. R. 5674 
To amend the Internal Revenue Code of 1986 to waive certain penalties 
for affected Federal employees receiving a distribution from the Thrift 
Savings Plan during a lapse in appropriations, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 3, 2025 
Mr. BEYER (for himself, Ms. ELFRETH, Ms. NORTON, Mr. SUBRAMANYAM, 
Ms. MCCLELLAN, Mr. WALKINSHAW, Mr. MOULTON, Ms. VELA´ZQUEZ, 
Mr. WHITESIDES, Mr. JACKSON of Illinois, Mr. NADLER, Mrs. MCIVER, 
Mrs. WATSON COLEMAN, Mr. CARTER of Louisiana, Ms. TLAIB, Mr. 
JOHNSON of Georgia, Mr. SCHNEIDER, Mr. GOLDMAN of New York, Ms. 
LOIS FRANKEL of Florida, Ms. MOORE of Wisconsin, Mr. THANEDAR, 
Mr. COSTA, and Mrs. MCCLAIN DELANEY) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Oversight and Government Reform, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to waive 
certain penalties for affected Federal employees receiving 
a distribution from the Thrift Savings Plan during a 
lapse in appropriations, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Emergency Relief for 
Federal Workers Act of 2025’’. 
SEC. 2. WAIVER OF 10-PERCENT ADDITIONAL TAX ON CER-
TAIN FINANCIAL HARDSHIP DISTRIBUTIONS 
FROM THRIFT SAVINGS PLAN. 
(a) IN GENERAL.—Paragraph (2) of section 72(t) of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following new subparagraph: 
‘‘(O) DISTRIBUTIONS
TO
FEDERAL
EM-
PLOYEES AFFECTED BY A QUALIFIED LAPSE IN 
APPROPRIATIONS.— 
‘‘(i) 
IN
GENERAL.—Distributions 
made from the Thrift Savings Plan under 
subchapter III of chapter 84 of title 5, 
United States Code, to an individual who 
is a Federal employee and who is on fur-
lough or who is working without pay due 
to a qualified lapse in appropriations, if 
such distributions are made during the pe-
riod of such qualified lapse in appropria-
tions (including distributions which are in 
process as of the end of such lapse). 
‘‘(ii) LIMITATION.—Subclause (i) shall 
apply to any distributions only to the ex-
tent the aggregate of such distributions 
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does not exceed $30,000 with respect to 
any qualified lapse in appropriations. 
‘‘(iii) 
ADJUSTMENT
FOR
INFLA-
TION.—In the case of a taxable year begin-
ning after December 31, 2025, the 
$30,000 amount in clause (ii) shall be in-
creased by an amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for the calendar year in which the tax-
able year begins, determined by sub-
stituting ‘calendar year 2024’ for ‘cal-
endar year 2016’ in subparagraph 
(A)(ii) thereof. 
If any amount after adjustment under the 
preceding sentence is not a multiple of 
$100, such amount shall be rounded to the 
next lower multiple of $100. 
‘‘(iv) QUALIFIED
LAPSE
IN
APPRO-
PRIATIONS.—For purposes of this subpara-
graph, the term ‘qualified lapse in appro-
priations’ means a period of continuous 
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lapse in Federal appropriations (including 
a partial lapse) of at least 2 weeks. 
‘‘(v) OTHER TERMS.—For purposes of 
this subparagraph, the terms ‘furlough’ 
and ‘pay’ have the respective meanings 
given such terms by section 7511 of title 
5, United States Code.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions made after Sep-
tember 30, 2025. 
SEC. 3. THRIFT SAVINGS PLAN PROVISIONS. 
(a) IN-SERVICE WITHDRAWALS.—Section 8433(h) of 
title 5, United States Code, is amended by adding at the 
end the following: 
‘‘(5)(A) In this paragraph— 
‘‘(i) the term ‘applicable date’, with respect to 
a covered age-based withdrawal or covered hardship 
withdrawal made during a qualified lapse in appro-
priations, means the date that is 120 days after the 
last day of the qualified lapse in appropriations; 
‘‘(ii) the term ‘covered age-based withdrawal’ 
means a withdrawal under paragraph (1)(A) made 
during the period of a qualified lapse in appropria-
tions; 
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‘‘(iii) the term ‘covered hardship withdrawal’ 
means a withdrawal described in subparagraph (B); 
‘‘(iv) the term ‘furlough’ has the meaning given 
the term in section 7511; 
‘‘(v) the term ‘pay’ has the meaning given the 
term in section 7511; and 
‘‘(vi) the term ‘qualified lapse in appropriations’ 
has the meaning given the term in section 
72(t)(2)(O) of the Internal Revenue Code of 1986. 
‘‘(B) The Board shall permit an employee who is on 
furlough or working without pay due to a qualified lapse 
in appropriations to make a withdrawal based upon finan-
cial hardship under paragraph (1)(B) if— 
‘‘(i) the withdrawal is made during the period 
of such qualified lapse in appropriations (including 
withdrawals which are in process as of the end of 
such lapse); and 
‘‘(ii) the aggregate amount of any such with-
drawals during the period described in clause (i) 
does not exceed $30,000, subject to adjustments for 
inflation under subparagraph (E). 
‘‘(C) The Board may not limit the number of covered 
hardship withdrawals that an employee may make during 
the period of a qualified lapse in appropriations, subject 
to the dollar limitation under subparagraph (B)(ii). 
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‘‘(D)(i) An individual who makes 1 or more covered 
hardship withdrawals or 1 or more covered age-based 
withdrawals during the period of a qualified lapse in ap-
propriations may, before the applicable date, make 1 or 
more contributions to the Thrift Savings Fund in an ag-
gregate amount not to exceed the lesser of— 
‘‘(I) the aggregate amount of the withdrawals; 
or 
‘‘(II) $30,000, subject to adjustments for infla-
tion under subparagraph (E). 
‘‘(ii) An individual who makes a contribution to the 
Thrift Savings Fund under clause (i) shall, to the extent 
of the contribution, be treated as having received the cov-
ered age-based withdrawal or covered hardship with-
drawal, as applicable, in an eligible rollover distribution 
(as defined in section 402(c)(4) of the Internal Revenue 
Code of 1986) and as having transferred the amount to 
the Thrift Savings Fund in a direct trustee to trustee 
transfer within 60 days of the distribution. 
‘‘(iii) For purposes of sections 401(a)(31), 402(f), 
and 3405 of the Internal Revenue Code of 1986, a covered 
age-based withdrawal or covered hardship withdrawal 
shall not be treated as an eligible rollover distribution. 
‘‘(E) The dollar limitation under subparagraphs 
(B)(ii) and (D)(i)(II) shall be adjusted for inflation in the 
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same manner as under section 72(t)(2)(O)(iii) of the In-
ternal Revenue Code of 1986. 
‘‘(F) The Board may rely on a written representation 
from an employee to determine, for purposes of this para-
graph, whether the employee has been furloughed or is 
working without pay due to a qualified lapse in appropria-
tions. 
‘‘(G) The Director may require each agency affected 
by a qualified lapse in appropriations, as part of the shut-
down procedures of the agency, to submit to the Executive 
Director a list with the name and social security number 
of each employee of the agency who will be furloughed or 
will work without pay due to the qualified lapse in appro-
priations.’’. 
(b) LOANS.—Section 8433(g) of title 5, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘(5)(A) The Board shall prescribe rules allowing 
loans to be made under this subsection to employees who 
are furloughed or working without pay due to a lapse in 
appropriations, without regard to the period of the lapse 
in appropriations. 
‘‘(B) For purposes of subparagraph (A), the terms 
‘furlough’ and ‘pay’ have the meanings given those terms 
in section 7511. 
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SEC. 4. MISSED LOAN PAYMENTS NOT TO BE TREATED AS 
TAXABLE DISTRIBUTION DURING A QUALI-
FIED LAPSE IN APPROPRIATIONS. 
(a) IN GENERAL.—Paragraph (2) of section 72(p) of 
the Internal Revenue Code of 1986 is amended by redesig-
nating subparagraph (E) as subparagraph (F) and by in-
serting after subparagraph (D) the following new subpara-
graph: 
‘‘(E) SPECIAL RULE FOR MISSED LOAN RE-
PAYMENT DURING A QUALIFIED LAPSE IN AP-
PROPRIATIONS.—Subparagraph (A) shall not 
fail to apply to any loan from the Thrift Sav-
ings Plan under subchapter III of chapter 84 of 
title 5, United States Code, solely because there 
is a payment missed because of a shutdown (as 
defined in section 8433(g)(6)(A)(i) of title 5, 
United States Code) with respect to such loan, 
and such loan (or any portion of such loan) 
shall not be treated as a taxable distribution 
solely because of such missed payment.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to missed loan payments the due 
date for which is after September 30, 2025. 
Æ 
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