S. 584 — Tax Fairness for Survivors Act

This section establishes an exclusion from gross income under new IRC §139J for amounts received by individuals as judgments, awards, or settlements (including back pay, front pay, punitive damages, attorney's fees reimbursements, or payments connected to a release or settlement of claims) related to (1) claims where the individual is the victim of a nonconsensual sexual act or sexual contact, as defined in 18 U.S.C. §2246 (i.e., penetration or intentional touching of specified areas with abusive or sexual intent), or similar Tribal, State, or local law (including cases where the victim lacks capacity to consent); or (2) sexual harassment under applicable Federal, Tribal, State, or local law. The exclusion applies to lump-sum or periodic payments and extends to specified employment taxes by amending IRC §§3121(a)(24) (FICA), 3231(e)(13) (railroad retirement tax), 3306(b)(21) (FUTA), and 3401(a)(24) (wage withholding). The amendments apply to taxable years beginning after enactment.