01.18.19

Capito Introduces Bill to Exempt Trafficking Survivors’ Restitution from Federal Taxes

Bipartisan bill for survivors comes during Human Trafficking Awareness Month

WASHINGTON, D.C. – U.S. Senator Shelley Moore Capito (R-W.Va.) yesterday co-sponsored the Human Trafficking Survivor Tax Relief Act (S. 169), which would exempt civil damages, restitution, and other monetary awards given to human trafficking survivors from federal income taxes. Led by Senators John Cornyn (R-Texas) and Ron Wyden (D-Ore.), other co-sponsors include Senators Tom Carper (D-Del.), Rob Portman (R-Ohio), and Amy Klobuchar (D-Minn.). 

“During Human Trafficking Awareness month, I’m proud to co-sponsor this bill that ends tax penalties on human trafficking survivors,” Senator Capito said. “These people have been through enough and deserve to be treated fairly as they navigate the judicial system in the pursuit of justice.” 

Under the Internal Revenue Code, civil damages awarded to human trafficking victims are considered taxable income. This legislation would exempt civil damages from federal income taxes, allowing survivors to file their taxes without worry of penalties or fees for not reporting awarded damages as income. It also would provide parity between criminal restitution, which is tax-exempt, and civil damages, which are not. Often, human trafficking survivors’ only recourse to pursue justice against traffickers is through civil litigation.

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