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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5566 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 5566

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

            December 17 (legislative day, December 16), 2024

    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.--Gross income shall not include any amount 
received as a judgment, award, or settlement (including back pay, front 
pay, punitive damages, or any payments made in connection with a 
release of claims or to resolve, settle, or litigate claims), whether 
by lump sum or periodic payments, from--
            ``(1) a dispute involving 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 dispute relating to conduct that is alleged to 
        constitute sexual harassment under applicable Federal, Tribal, 
        State, or local law, including common law claims permitted 
        under 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, such as compensation for services 
performed.''.
    (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.
                                 <all>
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