Supreme Court of the United States
Bnsf R. Co. v. Loos
March 4, 2019586 U.S. 310
Summary
The Supreme Court held that damages awarded under the Federal Employers’ Liability Act for lost wages are "compensation" taxable under the Railroad Retirement Tax Act. The Court also rejected the argument that the §104(a)(2) exemption for personal‑injury damages applies to RRTA taxes. Accordingly, the Eighth Circuit’s judgment was reversed and the case remanded.
Holding
- Whether an award of lost‑wage damages under the Federal Employers’ Liability Act constitutes "compensation" taxable under the Railroad Retirement Tax Act.. Yes; such damages are "compensation" within the meaning of 26 U.S.C. §3231(e)(1) and are taxable under the RRTA.
- Whether the exemption for personal‑injury damages in 26 U.S.C. §104(a)(2) shields such damages from RRTA taxation.. No; §104(a)(2) does not exempt FELA lost‑wage damages from RRTA taxes because the RRTA bases its tax on "compensation," not on "gross income."
Docket 17-1042