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Fill and Sign the Damages Income Tax as a Factor in Measuring Personal Form

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4.1 Effect Of Income Taxes Recovery Of Take-Home Pay Under the law, any award made to the Plaintiff in this case for past or future lost earnings is not subject to federal or state income tax. Therefore, in computing the amount of any damages that you may find the Plaintiff is entitled to recover for lost earnings, the Plaintiff is entitled to recover only the net, after-tax income. In other words, the Plaintiff is entitled to recover only "take-home pay" that you find the Plaintiff has lost in the past, or will lose in the future.ANNOTATIONS AND COMMENTSAlthough 26 USC § 104(a)(2) has been interpreted as excluding from taxable income lost wages awarded in a personal injury action, it remains uncertain following the passage of the Civil Rights Act of 1991 whether past or future earnings recovered in an employment discrimination cause of action would be excludable from taxable income. See United States v. Burke, 504 U.S. 229, 112 S.Ct. 1867, 119 L.Ed.2d 34 (1992) (Title VII prior to the 1991 Amendment); Commissioner v. Schleier, 515 U.S. 323, 115 S.Ct. 2159, 132 L.Ed.2d 294 (1995) (ADEA).

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