Federal

Human Trafficking Survivor Tax Relief Act

Source: Congress.gov · 375 words in original text

What This Bill Does

This bill changes federal income tax law so that people who receive money from human trafficking cases do not have to pay federal income taxes on that money. The money can come either from criminal court orders requiring the trafficker to pay restitution (repayment for harm caused) or from civil lawsuits (non-criminal court cases).

Who It Affects

People who receive restitution or monetary awards as survivors of human trafficking.

Key Provisions

• Money awarded through court-ordered restitution under federal trafficking law is excluded from a person's gross income for tax purposes (Sec. 2) • Money awarded through civil lawsuits under federal trafficking law is excluded from a person's gross income for tax purposes (Sec. 2) • The exclusion includes compensatory damages (money for actual losses) and statutory damages (money amounts set by law) (Sec. 2)

What Changes

If this bill becomes law, human trafficking survivors who receive restitution or damages will not count that money as income when filing their federal income taxes. This means they will not owe federal income taxes on these payments.

Important Definitions

Restitution: Money a court orders someone to pay to compensate a victim for harm caused. Civil damages: Money awarded in a non-criminal lawsuit as compensation. Gross income: The total money a person earns before taxes and deductions.

Effective Date

The changes apply to tax years that begin after this law is signed.

118TH CONGRESS 2D SESSION S. 159 AN ACT To amend the Internal Revenue Code of 1986 to provide an exemption from gross income for mandatory restitu- tion or civil damages as recompense for trafficking in persons. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 2 † S 159 ES SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Human Trafficking 2 Survivor Tax Relief Act’’. 3 SEC. 2. EXEMPTING FROM FEDERAL INCOME TAXATION 4 RESTITUTION AND CIVIL DAMAGES AWARD- 5 ED UNDER SECTIONS 1593 AND 1595 OF TITLE 6 18, UNITED STATES CODE. 7 (a) IN GENERAL.—Part III of subchapter B of chap- 8 ter 1 of the Internal Revenue Code of 1986 is amended 9 by inserting before section 140 the following new section: 10 ‘‘SEC. 139J. CERTAIN AMOUNT RECEIVED AS RESTITUTION 11 OR CIVIL DAMAGES AS RECOMPENSE FOR 12 TRAFFICKING IN PERSONS. 13 ‘‘(a) EXCLUSION FROM GROSS INCOME.—Gross in- 14 come shall not include any civil damages, restitution, or 15 other monetary award (including compensatory or statu- 16 tory damages and restitution imposed in a criminal mat- 17 ter) awarded— 18 ‘‘(1) pursuant to an order of restitution under 19 section 1593 of title 18, United States Code, or 20 ‘‘(2) in an action under section 1595 of title 18, 21 United States Code.’’. 22 (b) CONFORMING AMENDMENT.—The table of sec- 23 tions for part III of subchapter B of chapter 1 of the In- 24 ternal Revenue Code of 1986 is amended by inserting be- 25 3 † S 159 ES fore the item relating to section 140 the following new 1 item: 2 ‘‘Sec. 139J. Certain amount received as restitution or civil damages as rec- ompense for trafficking in persons.’’. (c) EFFECTIVE DATE.—The amendments made by 3 this section shall apply to taxable years beginning after 4 the date of the enactment of this Act. 5 Passed the Senate July 11 (legislative day, July 10), 2024. Attest: Secretary. 118TH CONGRESS 2D SESSION S. 159 AN ACT To amend the Internal Revenue Code of 1986 to provide an exemption from gross income for mandatory restitution or civil damages as rec- ompense for trafficking in persons.

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