Bill Details
S.584 - 119th Congress
Status
Latest action
2025-02-13 - Read twice and referred to the Committee on Finance.
Introduced Date
2025-02-13
Policy Area
Taxation
Committees
View committees (1)
Cosponsors
View cosponsors (1)
7
0
0
AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would change federal tax law so that money people receive from sexual assault or sexual harassment cases would generally not count as taxable income. That means judgments, awards, and settlements related to these claims would be exempt from federal income tax, whether the money is paid in one lump sum or over time. The bill says this includes things like back pay, front pay, punitive damages, attorney’s fees, and payments made to settle or release claims. It also updates related tax rules so these same payments are not treated as wages for certain payroll tax purposes. The change would apply to tax years beginning after the law is enacted.
- Excludes from federal income tax money received from claims involving sexual assault or sexual harassment.
- Covers several kinds of payments, including settlements, awards, judgments, back pay, front pay, punitive damages, and attorney’s fees.
- Also changes rules for Social Security taxes, railroad retirement taxes, unemployment taxes, and wage withholding so these payments are handled the same way across the tax code.
- Applies to taxable years that start after the bill becomes law.
Official Summaries
No summaries available
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 584 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 584
To amend the Internal Revenue Code of 1986 to exclude from gross income
any judgments, awards, and settlements with respect to sexual assault
or sexual harassment claims, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 13, 2025
Mrs. Gillibrand (for herself and Mrs. Blackburn) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to exclude from gross income
any judgments, awards, and settlements with respect to sexual assault
or sexual harassment claims, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tax Fairness for Survivors Act''.
SEC. 2. EXEMPTING FROM FEDERAL INCOME TAXATION PAYMENTS ALLOCABLE TO
SEXUAL ASSAULT OR SEXUAL HARASSMENT CLAIMS.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting before section
140 the following new section:
``SEC. 139J. AMOUNTS RECEIVED AS JUDGMENTS, AWARDS, AND SETTLEMENTS
WITH RESPECT TO SEXUAL ASSAULT OR SEXUAL HARASSMENT
CLAIMS.
``(a) In General.--In the case of an individual, gross income shall
not include any amount received as a judgment, award, or settlement
(including back pay, front pay, punitive damages, reimbursement of
attorney's fees, or any payments made in connection with a release of
claims or to resolve or settle claims), whether by lump sum or periodic
payments, from--
``(1) a claim involving such individual as the victim of an
alleged nonconsensual sexual act or sexual contact, as such
terms are defined in section 2246 of title 18, United States
Code, or similar applicable Tribal, State, or local law,
including when the victim lacks capacity to consent, or
``(2) a claim involving conduct that is alleged to
constitute sexual harassment of such individual under
applicable Federal, Tribal, State, or local law.
``(b) Regulations and Guidance.--The Secretary shall issue such
regulations or other guidance as the Secretary determines necessary to
carry out the purposes of this section, including regulations or other
guidance to distinguish amounts received in connection with a claim
described in subsection (a) from other amounts received as part of a
judgment, award, or settlement.''.
(b) Social Security Taxes.--Section 3121(a) of such Code is amended
by striking ``or'' at the end of paragraph (22), by striking the period
at the end of paragraph (23) and inserting ``; or'', and by inserting
after paragraph (23) the following new paragraph:
``(24) any amount received which is excludable from the
gross income of the employee under section 139J.''.
(c) Railroad Retirement Tax.--Section 3231(e) of such Code is
amended by adding at the end the following new paragraph:
``(13) Amounts received as judgments, awards, and
settlements with respect to sexual assault or sexual harassment
claims.--The term `compensation' shall not include any amount
received which is excludable from the gross income of the
employee under section 139J.''.
(d) Unemployment Taxes.--Section 3306(b) of such Code is amended by
striking ``or'' at the end of paragraph (19), by striking the period at
the end of paragraph (20) and inserting ``; or'', and by inserting
after paragraph (20) the following new paragraph:
``(21) any amount received which is excludable from the
gross income of the employee under section 139J.''.
(e) Wage Withholding.--Section 3401 of such Code is amended by
striking ``or'' at the end of paragraph (22), by striking the period at
the end of paragraph (23) and inserting ``, or'', and by inserting
after paragraph (23) the following new paragraph:
``(24) any amount received which is excludable from the
gross income of the employee under section 139J.''.
(f) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting before the item relating to section 140 the
following new item:
``Sec. 139J. Amounts received as judgments, awards, and settlements
with respect to sexual assault or sexual
harassment claims.''.
(g) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
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