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Tax Cuts and Jobs Act

Provision 13307

Denial of Deduction for Settlements Subject to Nondisclosure Agreements –

Sexual Harassment/Abuse

Overview

Introduction

Provision 13307 concerns settlement of attorney’s fees related to sexual harassment.

New Tax Provision

Prior Tax Law

There was no specific prior law applicable to this.

Sec 13307-Denial of Deduction for Settlements Subject to Nondisclosure Agreements – Sexual Harassment/Abuse

No deduction for certain payments made in sexual harassment or sexual abuse cases. For amounts paid or incurred after
December 22, 2017, new section 162(q) provides that no deduction is allowed under section 162 for any settlement or

payment related to sexual harassment or sexual abuse if it is subject to a nondisclosure agreement. In addition, attorney’s
fees related to such a settlement or payment are not allowed as a deduction.

73233-102 13307-1 Tax Cuts and Jobs Act