Allows Federal employees to make penalty-free distributions from Thrift Savings Plans after separation from Federal service, with income included.
The Thrift Savings Plan Emergency Withdrawal Act of 2025 amends the Internal Revenue Code to permit Federal employees who separate from Federal service to make penalty-free distributions from their Thrift Savings Plans. These distributions can be included in gross income over a 3-year period. The bill defines a "qualified civil service separation distribution" as any distribution made during the period beginning on the date the individual elects an annuity payment.
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