To amend the Internal Revenue Code of 1986 to provide that unearned income of a child attributable to damages received on account of personal injuries or sickness of the child shall not be taxed at the marginal rate of such child's parents.

Amends Internal Revenue Code provisions governing situations in which unearned income of a child under age 14 is taxed as if it were parental income. Excludes from income subject to the parental tax rate any earnings attributable to personal injury awards.