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Ways and Means advances bill to exempt sexual‑assault settlements from federal income tax
Summary
The committee unanimously voted to report H.R. 2347, the Survivor Justice Tax Prevention Act, which clarifies that compensation paid to sexual‑assault survivors is tax‑exempt without requiring proof of observable physical injury; Joint Committee staff estimated an $89 million revenue impact over FY2026–2036.
The House Ways and Means Committee on Wednesday voted to report H.R. 2347, the Survivor Justice Tax Prevention Act, to the House after bipartisan consideration and a unanimous recorded vote.
Representative Smucker, the Republican lead on the bill, told the committee the measure "resolves the inconsistency" that has required survivors of sexual assault to provide proof of visible physical injury to obtain tax‑exempt treatment, and said the change is intended to spare survivors from having to relive trauma to prove their claims. Representative Gwen Moore, who co‑authored the bill, said the legislation recognizes that "the harm is real and lasting even when it's not visible" and that survivors should not be forced to produce deeply personal records to receive tax relief.
A Joint Committee on Taxation staff summary presented by Tom Bartold, the committee's Joint Committee technical staff, described the chairman's amendment in the nature of a substitute and said the staff estimates a revenue loss of "$89 million over the budget period fiscal years 2026 through 2036." That technical description also explained that the amendment explicitly adds damages for sexual acts or sexual contact to the existing exclusion for physical injury or sickness and provides that a written statement in a decision or agreement that damages are attributable to sexual abuse will shift the burden of proof to the Secretary of the Treasury in litigation.
Committee members on both sides of the aisle described the bill as a measure of fairness and dignity for survivors and urged its quick consideration on the House floor. The committee adopted the amendment in the nature of a substitute and, following motion to report the bill favorably, the clerk recorded a vote of 41 yeas and zero nays.
The bill, as reported, would be placed on the House calendar for further consideration. Supporters said the change is intended to align treatment of sexual‑assault survivors with victims of other physical injuries and to reduce the administrative and emotional burdens survivors face when seeking tax‑exempt treatment for compensation they receive.
