YourVoice.Now Summary
Your MoneySurvivors would owe no income tax on money won in sexual abuse cases.
Your Money
Right now the IRS can tax this money unless you have medical records or visible injuries. The bill would drop that test, though money awarded to punish the wrongdoer stays taxable.
If a court ruling or settlement says the money is for a sexual act or contact, that statement counts as evidence. The IRS would then have to show it is wrong.
Treasury would work with the Justice Department's Office on Violence Against Women to spread the word. The goal is that people learn about the tax break before they file.
More about this bill
If you settle or win a case over sexual assault or abuse, part of that money can be taxed today. The IRS taxes damages unless there are medical records or visible injuries. Under this bill, that money would be tax-free. Punitive damages, which are meant to punish the wrongdoer, would still be taxed. The bill would also make the break easier to claim. Say your court ruling or settlement states the money is for a sexual act or contact. Then the IRS would have to prove otherwise. The break would cover rulings and deals made after the bill becomes law. Older settlements would not qualify, even if they are rewritten later. Treasury would also run a public campaign so survivors learn the break exists.
Congressional Summary
Survivor Justice Tax Prevention Act This bill excludes from gross income certain damages received by an individual due to any sexual act or sexual contact and establishes the applicable burden of proof in court proceedings regarding the characterization of such damages for federal tax purposes. Under current law, amounts received as damages (other than punitive damages) from a judgment, award, or settlement of a claim may be excluded from gross income and, thus, are not subject to federal income tax, if attributable to a personal physical injury or physical sickness. The Internal Revenue Service (IRS) generally interprets personal physical injury to require observable bodily harm (e.g., bruising, cuts, swelling, or bleeding). Under the bill, amounts received as damages (other than punitive damages) from a judgment, award, or settlement due to any sexual act or sexual conduct, whether or not there are medical records or observable injuries of such act or contact, may be excluded from gross income. Further, if a judgment, award, or settlement states that damages are due to any sexual act or sexual conduct, then the IRS has the burden of proving otherwise in court proceedings related to the tax liability associated with such damages. Finally, the bill requires the IRS to promote public awareness of the exclusion from gross income of damages related to any sexual act or sexual contact.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Passed House
- Action Date
- 2026-04-27
- Date Added
- 2026-04-24
- Source
- Congress.gov →
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