Creates a new exception to the 10% federal early‑withdrawal penalty so people who become long‑term unemployed can take penalty‑free distributions from retirement accounts. To qualify, a person must have received unemployment compensation for 26 consecutive weeks (or the State’s maximum) and take the distribution in the year unemployment is paid or the following year; dollar limits and coordination rules apply. The change amends the penalty rules in the Internal Revenue Code and applies to distributions made after December 31, 2024.