YourVoice.Now Summary
Your MoneyMoney won or settled in sexual assault cases would be free of income tax, except punitive damages.
Your Money
Today, this money is tax-free only if it is for a physical injury or illness. Emotional distress does not count. The bill would add money paid for a sexual act or contact. No medical records or visible injuries would be needed.
Say a court ruling or settlement says the money is for a sexual act or contact. That counts as evidence. If you end up in tax court over it, the IRS would have to prove it wrong.
Treasury would work with the Justice Department's Office on Violence Against Women and other agencies. The goal is for people to learn the tax break exists.
More about this bill
If you get money from a lawsuit or settlement over a sexual assault, it can be taxed today. Current law only makes damages tax-free when they are for a physical injury or physical sickness. Emotional distress does not count. Under this bill, damages for a sexual act or sexual contact would also be tax-free. That would be true even with no medical records or visible injuries. 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. If the IRS takes you to tax court over it, the IRS would have to prove otherwise. The break would cover rulings and deals made after the bill becomes law. A court ruling counts if its first payment arrives after that date. A new deal that replaces or revises an older one would not qualify. 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
- Senate
- Status
- summarized
- Action
- Introduced in Senate
- Action Date
- 2026-09-15
- Date Added
- 2026-10-15
- Source
- Congress.gov →
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