CACI No. 2940. Income Tax Effects of Award

Judicial Council of California Civil Jury Instructions (2023 edition)

Download PDF
Bg806
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.]
New September 2003
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 & W. 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.)
200

© Judicial Council of California.