What does Preamble of HR 6929 do?

This bill proposes to amend the Internal Revenue Code of 1986. It aims to allow Federal employees separated from Federal service to make penalty-free distributions from Thrift Savings Plans. Such distributions would be included in gross income over a period of 3 years.

What does SHORT TITLE. of HR 6929 do?

This bill is formally titled the Thrift Savings Plan Emergency Withdrawal Act of 2025.

What does TAX-FAVORED WITHDRAWALS FROM THRIFT SAVINGS PLAN FOLLOWING of HR 6929 do?

This section outlines rules for tax-favored withdrawals from the Thrift Savings Plan (TSP) following separation from federal service. Section 72(t) of the Internal Revenue Code does not apply to qualified civil service separation distributions. Distributions are generally included in gross income ratably over a 3-year period, unless the taxpayer elects otherwise. The aggregate amount treated as a qualified civil service separation distribution is limited to $100,000. Individuals can elect to treat a qualified distribution as an eligible rollover distribution and repay it to an eligible retirement plan within a year. Repaid amounts can be contributed to an eligible retirement plan, treated as a direct trustee-to-trustee transfer. A 'qualified civil service separation distribution' is defined as a distribution made during a specific period after separation from civil service and before the first annuity payment. Certain rules regarding 3-year averaging apply to these distributions. Distributions are exempt from certain trustee-to-trustee transfer and withholding rules. This section applies to distributions made after January 20, 2025.

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Thrift Savings Plan Emergency Withdrawal Act of 2025 — HR. 6929

Last updated: 12/23/2025 · Introduced: 12/23/2025

Author: Eleanor Norton (D-DC)

TL;DR (AI)

This bill allows federal employees separated from service to make penalty-free withdrawals from their Thrift Savings Plan (TSP).
Withdrawals are generally taxed as ordinary income over a three-year period, up to a maximum of $100,000.
The bill enables individuals to repay TSP withdrawals to an eligible retirement plan within a year, treating it as a trustee-to-trustee transfer.

119th Congressin committeeOfficial page

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Includes provisions on preamble, short title., and 1 more.

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