Tax Fairness for Survivors Act

This bill would make it so that money people receive from legal judgments, awards, or settlements related to sexual harassment or sexual assault would not be taxed as income. This includes back pay, future pay, punitive damages, attorney's fees, and any other payments made to resolve these kinds of claims. The bill would also make sure these payments are not subject to payroll taxes like Social Security and unemployment insurance taxes. Under current law, settlement money can only be excluded from taxes if it is tied to a physical injury or physical sickness, but this bill would extend that tax-free treatment to sexual harassment and sexual assault claims even when no physical injury is involved.

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