The daily press coverage disclosing alleged actions of high profile men accused of sexual harassment in the workplace, has resulted in a change to the tax treatment of settlements in claims of sexual harassment and discrimination.

Under a key provision of the new tax law: “No deduction shall be allowed under this chapter for any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or attorney fees related to such settlement or payment.

Under the law as written, no taxpayer (neither the complaining party nor the employer) can claim the settlement amount or attorney fees paid in a sexual harassment case as tax deduction—and keep the settlement terms confidential.