U.S. Senator John Cornyn (R), joined by Ron Wyden (D-OR), James Lankford (R-OK), and Raphael Warnock (D-GA), has introduced the Human Trafficking Survivor Tax Relief Act, a bipartisan bill designed to exempt civil damages, restitution, and other monetary awards given to survivors of human trafficking from federal income taxes.
The legislation also formally codifies existing IRS guidance that already exempts restitution payments issued through criminal cases.
"Texans who have been exploited, coerced, or forced into involuntary sexual acts or labor should not have to pay taxes on the payments awarded to them after enduring such a horrific crime," said Sen. Cornyn. "Providing these survivors with tax relief is one small step we can take to alleviate some of the burden on their journey to healing."
Sen. Wyden emphasized fairness, noting that survivors "have been to hell and back" and shouldn't face a tax bill while rebuilding their lives. Sen. Lankford added that the legislation ensures survivors are not "punished by the U.S. tax code" as they seek closure and justice.
In the House, the bill is being introduced by Rep. Jodey Arrington (R) and Brad Schneider (D-IL).
Rep. Arrington emphasized that the government should not add financial insult to the trauma survivors already carry.
"There is no amount of compensation that can remedy the many horrors that victims of human trafficking have to endure," said Arrington. "As we work to eradicate this heinous crime, we should ensure these victims aren't burdened with tax penalties and reporting requirements when they receive civil damages or restitution."
Rep. Schneider noted that the bill eliminates an unjust discrepancy between criminal and civil payments, ensuring "no survivor should be burdened for seeking justice."
Currently, civil damages awarded to trafficking survivors are considered taxable income under the Internal Revenue Code. The bill would change that, ensuring that both civil and criminal restitution payments remain tax-free and allowing survivors to pursue justice without facing additional financial hardship.
