Emergency Relief for Federal Contractors Act of 2025

This bill provides tax relief for workers affected by federal government shutdowns. It allows federal contractors, their employees on unpaid leave during shutdowns, and related workers (like those for federal grantees, states, or DC government) to withdraw up to $30,000 from retirement accounts without the usual 10% early withdrawal penalty. Withdrawals can be repaid within 3 years to avoid tax consequences, and income from the withdrawal is spread over 3 years if elected. The $30,000 limit adjusts annually for inflation.