119-s584

[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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