YourVoice.Now Summary
Average Household ImpactMakes settlement money from sexual assault or abuse cases tax-free, so survivors keep more of what they recover.
Average Household Impact
- Tax exclusion for sexual-assault damages — Money received for sexual acts or contact would no longer be taxed as income, except punitive damages
The details
People who win money in sexual assault or abuse cases can owe federal income tax on part of it. This bill would exempt those damages from income tax. Under current law, settlements for physical injuries are tax-free, but other damages may be taxed. The bill would exclude money received for any sexual act or sexual contact, except punitive damages. It would apply whether or not there are medical records or visible injuries. If a settlement or ruling says the money is for such conduct, that would count as proof. The change would let survivors keep more of what they recover.
Congressional Summary
Survivor Justice Tax Prevention ActThis 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
- Received in the Senate.
- Action Date
- 2026-04-28
- Date Added
- 2026-04-24
- Source
- Congress.gov →
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