U.S. Senators Kirsten Gillibrand and Marsha Blackburn introduced the Tax Fairness for Survivors Act, a bipartisan and bicameral bill that would remove the federal tax penalty on settlements, awards, and judgments paid to survivors of sexual harassment and sexual assault.
Current law exempts payments for damages due to physical and emotional injuries from physical injury cases from taxation. However, payments from sexual harassment and sexual assault lawsuits are taxed as income unless the survivor can prove that they received physical injuries, such as broken bones or bruises, during the incident. This can cause uncertainty in some cases regarding whether settlements from sexual assault or sexual harassment cases are taxed or not, causing additional anxiety for survivors.
“It is unacceptable to force survivors of sexual assault and harassment to pay taxes on the compensation they rightfully deserve,” said Senator Gillibrand. “The Tax Fairness for Survivors Act is commonsense legislation that will eliminate this tax burden, allowing survivors to focus on healing in the wake of their trauma. I am proud to introduce this legislation, and I will continue fighting to ensure that survivors of sexual assault and harassment are treated with the dignity and respect they deserve.”
“Survivors of sexual assault and sexual harassment should not be forced to pay taxes on compensation they receive as a result of the crime,” said Senator Blackburn. “The Tax Fairness for Survivors Act would ensure these courageous survivors do not have to bear the cost of unjust financial penalties.”
Gillibrand and Blackburn’s introduction of the Tax Fairness for Survivors Act follows the introduction of the same legislation in the House of Representatives by Reps. Lois Frankel (D-FL-22) and Claudia Tenney (R-NY-24) in August. The bill is endorsed by the National Alliance to End Sexual Violence and Lift Our Voices.
“Survivors of sexual harassment and assault deserve fair treatment under the law,” said Representative Frankel. “It is unacceptable for a woman who has been raped, who endures immense pain and trauma, or who had to quit her job to escape harassment, to face further tax burdens on the compensation she rightfully deserves. This bill ensures survivors receive equal treatment regarding their payments.”
“Survivors of assault have already endured the unimaginable; they should not face tax penalties on monetary settlements obtained in their pursuit of justice. This commonsense bill closes an unfair loophole in our tax code by exempting settlements and judgments from sexual harassment or assault claims from income taxes, aligning the tax treatment of these settlements with physical injury settlements and ensuring survivors are not further penalized,” said Congresswoman Tenney.
The full text of the bill can be found here.
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