Tax Fairness for Survivors Act

The Tax Fairness for Survivors Act would exempt from federal income tax payments received as settlements or judgments for sexual assault or sexual harassment claims, including back pay, front pay, and punitive damages. This applies to claims involving nonconsensual sexual acts (as defined under federal or state law) or sexual harassment under applicable federal, tribal, state, or local law. The bill also ensures these excluded payments are not subject to Social Security, railroad retirement, or unemployment taxes. The changes would take effect for tax years beginning after the bill's enactment.