[Congressional Record Volume 171, Number 113 (Monday, June 30, 2025)]
[Senate]
[Page S4097]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 2695. Mrs. GILLIBRAND submitted an amendment intended to be 
proposed by her to the bill H.R. 1, to provide for reconciliation 
pursuant to title II of H. Con. Res. 14; which was ordered to lie on 
the table; as follows:

       At the appropriate place in subtitle A of title VII, insert 
     the following:

     SEC. ___. EXEMPTING FROM FEDERAL INCOME TAXATION PAYMENTS 
                   ALLOCABLE TO SEXUAL ASSAULT OR SEXUAL 
                   HARASSMENT CLAIMS.

       (a) In General.--Part III of subchapter B of chapter 1, as 
     amended by the preceding provisions of this Act, is amended 
     by inserting before section 140 the following new section:

     ``SEC. 139M. AMOUNTS RECEIVED AS JUDGMENTS, AWARDS, AND 
                   SETTLEMENTS WITH RESPECT TO SEXUAL ASSAULT OR 
                   SEXUAL HARASSMENT CLAIMS.

       ``(a) In General.--In the case of an individual, gross 
     income shall not include any amount received as a judgment, 
     award, or settlement (including back pay, front pay, punitive 
     damages, or any payments made in connection with a release of 
     claims or to resolve, settle, or litigate claims), whether by 
     lump sum or periodic payments, from--
       ``(1) a claim involving an alleged nonconsensual sexual act 
     or sexual contact, as such terms are defined in section 2246 
     of title 18, United States Code, or similar applicable 
     Tribal, State, or local law, including when the victim lacks 
     capacity to consent, or
       ``(2) a claim relating to conduct that is alleged to 
     constitute sexual harassment under applicable Federal, 
     Tribal, State, or local law.
       ``(b) Regulations and Guidance.--The Secretary shall issue 
     such regulations or other guidance as the Secretary 
     determines necessary to carry out the purposes of this 
     section, including regulations or other guidance to 
     distinguish amounts received in connection with a claim 
     described in subsection (a) from other amounts received as 
     part of a judgment, award, or settlement.''.
       (b) Social Security Taxes.--Section 3121(a) is amended by 
     striking ``or'' at the end of paragraph (22), by striking the 
     period at the end of paragraph (23) and inserting ``; or'', 
     and by inserting after paragraph (23) the following new 
     paragraph:
       ``(24) any amount received which is excludable from the 
     gross income of the employee under section 139M.''.
       (c) Railroad Retirement Tax.--Section 3231(e) is amended by 
     adding at the end the following new paragraph:
       ``(13) Amounts received as judgments, awards, and 
     settlements with respect to sexual assault or sexual 
     harassment claims.--The term `compensation' shall not include 
     any amount received which is excludable from the gross income 
     of the employee under section 139M.''.
       (d) Unemployment Taxes.--Section 3306(b) is amended by 
     striking ``or'' at the end of paragraph (19), by striking the 
     period at the end of paragraph (20) and inserting ``; or'', 
     and by inserting after paragraph (20) the following new 
     paragraph:
       ``(21) any amount received which is excludable from the 
     gross income of the employee under section 139M.''.
       (e) Wage Withholding.--Section 3401 is amended by striking 
     ``or'' at the end of paragraph (22), by striking the period 
     at the end of paragraph (23) and inserting ``, or'', and by 
     inserting after paragraph (23) the following new paragraph:
       ``(24) any amount received which is excludable from the 
     gross income of the employee under section 139M.''.
       (f) Clerical Amendment.--The table of sections for part III 
     of subchapter B of chapter 1, as amended by the preceding 
     provisions of this Act, is amended by inserting before the 
     item relating to section 140 the following new item:

``Sec. 139M. Amounts received as judgments, awards, and settlements 
              with respect to sexual assault or sexual harassment 
              claims.''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______