California Civil Jury Instructions (CACI)

2940. Income Tax Effects of Award

[Name of plaintiff] will not be required to pay any federal or state income taxes on any amount that you award.

[When calculating lost earnings, if any, you should use after-tax earnings.]

Directions for Use

The Eighth Circuit Model Jury Instructions state that the bracketed sentence should be given if there is evidence of both gross and net earnings and there is any danger that the jury may be confused as to the proper measure of damages.

Sources and Authority

If requested, the jury must be instructed that the verdict will not be subject to income taxes. (Norfolk & Western Ry. Co. v. Liepelt (1980) 444 U.S. 490, 498 [100 S.Ct. 755, 62 L.Ed.2d 689].) Further, the Supreme Court in the Liepelt case stated that the jury should base its award on the "after-tax" value of lost earnings in determining lost earnings. (Id. at p. 493.)

(New September 2003)