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Russell Cawyer Authors Blog on Deducting Payouts on Sexual Harassment Settlements

Russell Cawyer's blog post—entitled “New Tax Law Limits Deductibility of Sexual Harassment and Abuse Settlements Containing Nondisclosure Provisions” and published on the Texas Employment Law Update—addresses provisions of the new tax reform law signed by President Trump on December 20, 2017. 

The Tax Cuts and Jobs Act states that businesses cannot deduct settlements, payouts, attorney fees, or other expenses related to sexual harassment or sexual abuse if such payments are subject to a nondisclosure agreement.  Employers settling sexual harassment or sexual abuse claims should consult with their employment lawyer and tax professionals to evaluate the effect the tax law has on settlements paid or incurred after December 20, 2017.

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