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End the Unfair Taxation on Emotional Injury: Support the No Tax on Trauma Act

Imagine surviving one of the most traumatic experiences of your life, only to face a financial penalty for seeking justice and healing. This is the reality for many survivors of emotional trauma under current tax laws, but with your help, we can end this unfair practice.

The Problem

Emotional injuries are just as real and impactful as physical injuries, but under existing tax law, emotional damages are taxed—unless they are directly tied to a physical injury. This means that individuals who experience trauma, such as survivors of sexual assault, domestic violence, accidents, and other life-altering events, may be forced to pay taxes on settlements designed to help them heal.

Consider the story of one survivor of sexual assault:

“In 2017, my life changed forever. After surviving a sexual assault, I fought to rebuild my life and sought justice through the legal system. I was awarded a $60,000 settlement to help me heal and move forward. But instead of relief, I was hit with a devastating $55,000 tax bill—because my pain and suffering were treated as taxable income.”

This is not an isolated case. Emotional damages, which are often central to a survivor’s healing process, are taxed up to 37%—leaving survivors with less money to pay for counseling, medical bills, and other expenses critical to their recovery. Rather than offering support, the government is taxing the very thing that should be helping these individuals rebuild their lives.

The Solution: The No Tax on Trauma Act

The No Tax on Trauma Act offers a simple, fair solution: it would end the taxation of emotional injury settlements by ensuring that emotional damage awards are treated the same as physical injury settlements—tax-free.

This bill is not just about financial fairness; it’s about recognizing the value of mental health and emotional well-being in the same way we recognize physical injuries. Survivors of trauma deserve to heal without being burdened by an additional financial penalty.

Why This Matters

This issue impacts anyone who has experienced trauma, regardless of the cause. Whether it’s violence, abuse, accidents, or any other life-changing event, the No Tax on Trauma Act will help survivors from all walks of life.

Taxing emotional injury settlements is not just an injustice—it’s a deeply human issue. Survivors should not have to endure the additional hardship of financial penalties when they’re already working to rebuild their lives.

How You Can Help

You can be part of the movement to end this unfair practice. Join Arella Foundation, a nonprofit organization dedicated to advocating for the rights and well-being of survivors, in calling on Congress to pass the No Tax on Trauma Act.

Here’s what you can do:

  • Sign the petition to demand an end to the taxation of emotional injury settlements.
  • Raise awareness about the issue and encourage others to sign.
  • Support federal action to amend tax laws and align emotional injury settlements with physical injury settlements, ensuring fairness and consistency for all survivors.

We are close to reaching a major milestone: 194 people have already signed Arella Foundation’s petition. Let’s reach 200 and continue pushing for change. Sign the petition today with just one click at Arella.org/NoTaxOnTraumaAct.

Survivors of trauma should not be financially penalized for seeking justice and healing. By supporting the No Tax on Trauma Act, you are helping to ensure that individuals who have experienced emotional injury are treated with the fairness and dignity they deserve.

Let’s work together to end the unfair taxation on emotional injury. Survivors deserve to be made whole, not further punished. Sign the petition today and stand up for justice.