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Young, Cortez Masto Introduce Bill to Change Tax Treatment of Sexual Assault Settlements

WASHINGTON (WOWO) — U.S. Sen. Todd Young, R-Ind., and Sen. Catherine Cortez Masto, D-Nev., are introducing bipartisan legislation aimed at changing how the federal tax code treats settlements received by sexual assault survivors.

The Survivor Justice Tax Prevention Act would allow qualifying damages from sexual assault cases to be excluded from taxable income, except for punitive damages.

Under the proposal, survivors could use a court decision or settlement agreement as evidence that the money was received because of sexual acts or sexual contact. The bill is intended to address cases in which survivors receive settlements but cannot provide evidence of a visible physical injury.

Young said the legislation would remove an additional financial burden for people who pursue legal action against their abusers.

The legislation was previously approved by the U.S. House. The House passed H.R. 2347, the Survivor Justice Tax Prevention Act, by voice vote April 27. The measure was received by the Senate the following day and placed on the Senate legislative calendar in July.

The House version would exclude compensatory damages tied to sexual acts or sexual contact from gross income and would allow court decisions or settlement agreements to serve as evidence for the tax exclusion.

The legislation was introduced in the House by Reps. Lloyd Smucker, R-Pa., and Gwen Moore, D-Wis.

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