The Human Trafficking Survivor Tax Relief Act would exclude restitution and civil damages awarded to human trafficking survivors from their taxable income. Currently, survivors who receive court-ordered restitution from criminal cases or damages from civil lawsuits under federal anti-trafficking laws must count this money as income and pay taxes on it. This bill eliminates that tax burden by creating a new tax exemption for trafficking survivors receiving these payments. The legislation applies to any compensatory or statutory damages awarded through criminal restitution orders or civil actions related to human trafficking cases, and the tax break would take effect for taxable years beginning after the bill is enacted. This change recognizes that restitution and damages are meant to compensate victims for harm rather than serve as taxable income.
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