This bill would amend federal tax law to exclude settlement payments and lawsuit damages related to sexual abuse from being counted as taxable income. Currently, survivors who receive compensation for sexual acts or sexual contact may face federal income taxes on those damages, and this legislation eliminates that tax burden. The bill applies to all non-punitive damages awarded through court judgments or settlement agreements entered into after the law's enactment, and it prevents the IRS from requiring medical records as proof that damages relate to sexual abuse. The legislation also requires the Treasury Department and Department of Justice to launch a public awareness campaign to inform survivors that these settlements are now tax-free.
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