You have probably heard about the many tax deductions that you
are losing (or have lost) as a result of the new tax law (known as
the Tax Cuts and Jobs Act, or TCJA). But, if you are an employer,
one that you may not have heard about – or may not have had
reason to hear about – is loss of the Federal income tax
deduction for amounts paid in settlement of claims relating to
sexual harassment and/or sexual abuse, as well as attorneys'
fees paid with respect to any such settlement or payment, if the
settlement or payment is subject to a nondisclosure agreement.
Obviously, this will have a major effect upon the economics of
any settlement that an employer may enter into in cases involving
claims of sexual harassment or abuse, where a nondisclosure
agreement is desired, as the actual cost of the settlement will
increase by an amount equal to the tax on the now-nondeductible
settlement payment (and related attorneys' fees). In the case
of a corporate employer, this could be
