H.R. 1306

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1306 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 1306

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 HOUSE OF REPRESENTATIVES

February 13, 2025

Ms. Lois Frankel of Florida (for herself and Ms. Tenney) introduced the 
following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

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 backpay, frontpay, 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 the 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 the individual under applicable 
Federal, Tribal, State, or local law.
``(b) Regulations.--The Secretary shall prescribe such regulations 
and other guidance as are necessary to carry out the purposes of 
section, including regulations and other guidance to distinguish 
amounts received in connection with a claim described in subsection (a) 
from other amounts received.''.
(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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