Sponsors (4)
The bill ensures victims keep the full value of federal restitution and damages by excluding those awards from taxable income, at the cost of a modest reduction in federal revenue and some potential tax-reporting/administrative complexity.
Crime victims who receive restitution or civil damages under 18 U.S.C. §§1593 or 1595 keep the full award because those payments are excluded from taxable income, increasing their net recovery and reducing the financial burden of pursuing relief.
Federal budget and other taxpayers: excluding these awards from taxable income modestly reduces the federal revenue base, potentially shifting costs to other taxpayers or requiring tradeoffs in federal spending.
Recipients, tax preparers, and the IRS: without clear guidance, recipients may face confusion or disputes when filing, increasing the risk of audits, appeals, or administrative burden on tax authorities.
Based on analysis of 2 sections of legislative text.
Excludes monetary awards and restitution to human trafficking survivors under 18 U.S.C. §§1593 and 1595 from federal gross income.
Official title: To amend the Internal Revenue Code of 1986 to exclude from gross income mandatory restitution or civil damages received as recompense for trafficking in persons.
Introduced November 20, 2025 by Brad Schneider · Last progress November 20, 2025
Excludes from federal taxable income monetary awards and restitution received by human trafficking survivors under federal trafficking statutes. The change adds a new Internal Revenue Code provision that prevents civil damages, compensatory or statutory awards, and criminal restitution tied to 18 U.S.C. §1593 or §1595 from being taxed for taxable years beginning after enactment.