This bill amends federal tax law to exempt human trafficking survivors from paying income taxes on restitution payments and civil damages they receive. Currently, these compensation payments may be considered taxable income, which reduces the actual money survivors receive to rebuild their lives. The legislation applies to both criminal restitution ordered by courts and civil damages awarded through lawsuits under federal trafficking laws. The exemption would take effect for the tax year following the bill's enactment and has no specified funding requirements, as it simply removes certain payments from the taxable income calculation. The bill was introduced by a bipartisan group of senators and referred to the Senate Finance Committee in November 2025.
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