The US Supreme Court on Monday ruled that a railroad’s payment to an employee for lost wages due to an on-the-job injury is taxable “compensation” under the Railroad Retirement Tax Act (RRTA).
In BNSF Railway Company v. Loos, the justices ruled 7-2 in favor of the Railway Company. BNSF asserted that their payment of lost wages to employee, Michael Loos, were considered taxable, and asked to withhold a portion of the lost wages to cover Loos’ share of the RRTA taxes.