A bill to amend the Internal Revenue Code of 1986 to exclude from gross income any judgments, awards, and settlements with respect to sexual assault or sexual harassment claims, and for other purposes.
About This Bill
Committee
Latest Action · December 17, 2024
Read twice and referred to the Committee on Finance.
The Tax Fairness for Survivors Act would exclude compensation received from sexual assault or sexual harassment claims from federal income tax. This applies to all forms of settlements, judgments, and awards—including back pay, front pay, and punitive damages—whether paid as lump sums or over time. The bill covers claims related to nonconsensual sexual acts or conduct that qualifies as sexual harassment under federal, tribal, state, or local law. The changes would also apply to Social Security taxes, railroad retirement taxes, unemployment taxes, and wage withholding calculations, ensuring survivors are not penalized by payroll taxes on these settlement amounts. The exemption would take effect for tax years beginning after the law is enacted, and the Treasury Department would issue regulations to distinguish settlement amounts related to sexual assault or harassment claims from other compensation like back wages for services performed.
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