Emergency Relief for Federal Contractors Act of 2025

This bill would let certain workers take money out of retirement accounts during a federal government shutdown without paying the usual 10% early-withdrawal tax penalty. It covers federal contractors and their employees, certain state and federal grantee employees paid with federal funds, and certain District of Columbia government and court employees who are furloughed, on unpaid leave, or working without pay during a funding lapse of at least 2 weeks. Withdrawals would be limited to $30,000 per year, adjusted for inflation after 2025. People could repay the money to a retirement plan within 3 years, and the income from a withdrawal would be spread over 3 tax years unless the person chooses otherwise.

Full text and official record on Congress.gov

Sponsors

• Catherine Cortez Masto Democrat sponsor
• 14 cosponsors