Referred to the House Committee on Ways and Means.
The bill amends Internal Revenue Code section 104(a)(2) to exclude from gross income any damages (other than punitive damages) received on account of any sexual act or sexual contact. It adds a rule that damages will qualify if the judgment or agreement states they are on account of such acts and prohibits denying substantiation solely for lack of medical records.
Disagreement over fraud and settlement-labeling risks
Relative to its intended legislative type, this bill is a clear statutory amendment to the Internal Revenue Code to exclude from gross income non-punitive damages on account of sexual acts or sexual contact, with several targeted implementation provisions but limited administrative and fiscal scaffolding.
The bill amends Internal Revenue Code section 104(a)(2) to exclude from gross income any damages (other than punitive damages) received on account of any sexual act or sexual contact.
It adds a rule that damages will qualify if the judgment or agreement states they are on account of such acts and prohibits denying substantiation solely for lack of medical records.
The changes apply to judgments and agreements after enactment (with specified special rules), and Treasury must run a public awareness program in consultation with relevant agencies.
Content is narrow and sympathetic but creates some revenue exposure and faces procedural hurdles, especially in the Senate without broad agreement.
Relative to its intended legislative type, this bill is a clear statutory amendment to the Internal Revenue Code to exclude from gross income non-punitive damages on account of sexual acts or sexual contact, with several targeted implementation provisions but limited administrative and fiscal scaffolding.
Disagreement over fraud and settlement-labeling risks
These are examples from the analysis, not a ranked list of the most-affected groups.
Disagreement over fraud and settlement-labeling risks
Views the bill as a restorative step removing an unfair tax burden from survivors of sexual assault and contact.
Sees the prohibition on medical-record requirements as reducing retraumatization and barriers to relief.
Expects improved financial outcomes for survivors and greater access to justice.
Generally supportive as a targeted reform that eases burdens on survivors while keeping punitive damages taxable.
Wants clear definitions and administrative guidance to limit abuse and to estimate fiscal effects.
Sees value in the public-awareness directive but requests mechanisms to monitor implementation.
Likely sympathetic to providing relief for genuine survivors but cautious about broadening tax-exempt categories.
Concerned the provision could expand exemptions, invite settlement-labeling to avoid tax, and create fiscal and enforcement issues.
Would favor stronger anti-fraud and definitional limits or offsets.
Reached or meaningfully advanced
Reached or meaningfully advanced
Still ahead
Still ahead
Still ahead
Content is narrow and sympathetic but creates some revenue exposure and faces procedural hurdles, especially in the Senate without broad agreement.
The bill has not accumulated any surfaced votes yet.
Disagreement over fraud and settlement-labeling risks
Content is narrow and sympathetic but creates some revenue exposure and faces procedural hurdles, especially in the Senate without broad ag…
Relative to its intended legislative type, this bill is a clear statutory amendment to the Internal Revenue Code to exclude from gross income non-punitive damages on account of sexual acts or sexual contact, with severa…
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