Sponsors (18)
The bill closes a tax exception by making civil damages to the President taxable—boosting revenue and tax parity for the public while increasing tax costs for recipients and creating a precedent that may affect future damage settlements.
Taxpayers: Civil damages paid to the President (and similar payments) will be included in the regular tax base rather than treated as tax-free, reducing special exceptions and likely increasing federal revenue.
Federal officials (including the President): Treating damages as taxable income creates parity between damages and other forms of compensation, aligning tax treatment across pay types.
Public officials and other damage recipients: Establishes a precedent that could broaden taxation of damages or change expectations for settlement structuring, potentially complicating negotiations and administrative treatment of future payments.
The President and any federal employees who receive damages: Imposes a new or increased tax liability on those payments, reducing recipients' after-tax recovery.
Based on analysis of 2 sections of legislative text.
Makes damages the President receives from civil actions against the United States taxable and updates related IRS code language.
Makes damages the President receives from civil actions filed against the United States subject to federal income tax and adjusts related Internal Revenue Code language to reflect that tax treatment. The change applies to amounts received after the law takes effect.
Introduced February 4, 2026 by Michael Thompson · Last progress February 4, 2026