Sponsor
Jefferson Van Drew
Representative · R-NJ
Representative · R-NJ
The bill increases net recoveries and reduces tax paperwork for Camp Lejeune claimants by exempting their awards from federal income tax, while modestly reducing federal revenue and creating unequal tax treatment compared with other similar plaintiffs.
Veterans and other Camp Lejeune Justice Act claimants will receive their damage awards tax-free, so these individuals keep more of their settlements and recoveries.
Recipients of these tax-free awards face fewer federal tax reporting requirements and less administrative burden when filing taxes related to their awards.
Federal tax revenue will be reduced by exempting these awards, slightly increasing budgetary pressure or contributing marginally to the deficit.
Other plaintiffs who receive damages for comparable toxic-exposure or injury claims but are not covered by this exemption may be treated unequally under the tax code.
Based on analysis of 2 sections of legislative text.
Makes damages received under the Camp Lejeune Justice Act of 2022 exempt from federal gross income.
Official title: To amend the Internal Revenue Code to exclude certain damages from gross income.
Introduced October 31, 2025 by Jefferson Van Drew · Last progress October 31, 2025
Excludes payments awarded under the Camp Lejeune Justice Act of 2022 from taxable gross income by adding those damages to the list of income exclusions in 26 U.S.C. §104(a). The change applies to damages received after the law takes effect, so recipients of Camp Lejeune settlements or judgments would not owe federal income tax on those amounts.