By 1939, in the last dire years of the Depression, Neibaur was destitute. He received a small pension from his Medal of Honor, and was a clerk for Works Progress Administration (WPA). He was unable to feed and care for his family on his low income. US Senator William Borah of Idaho attempted to pass a law in the US Congress promoting Neibaur to the rank of major in the regular army, and then placing him on the retired list. This failed. Discouraged by his misfortune, Neibaur mailed his Medal of Honor and other decorations to Congress in Washington stating that "I cannot eat them." Local newspapers covered the story. Three days later he secured a position as a night security officer at the state capitol in Boise. His wife Lois died in 1940, at the age of forty-eight from complications of rheumatic fever from her childhood. Neibaur married Lillian Golden in 1941, and a short time later he entered a veterans' hospital in Walla Walla, Washington for tuberculosis and died there on December 23, 1942, at the age of forty-four. Four young sons were sent to an orphanage in Eaton Rapids, Michigan. He and Lois are buried in Sugar City, Idaho. His awards and decorations were returned to Mrs. Lillian Neibaur who donated them to the Idaho State Historical Society. Thomas C. Neibaur Veteran Park is located in Sugar City, Idaho with a granite monument commemorating Neibaur.