Taxes on railroad back pay
BNSF R. v. Loos
In brief
BNSF won the tax question: its payment to Loos for missed work counts as taxable pay, and the Eighth Circuit’s ruling was overturned.
- Where it stands
- Decided
Decided 7-2 · March 4, 2019 · Opinion by Justice Ginsburg
- What it’s about
- The Supreme Court ruled that BNSF’s payment to Michael Loos for work time he missed because of an on-the-job injury counted as taxable compensation under the Railroad Retirement Tax Act.
- Who it affects
- BNSF’s payment to Loos for work time he missed because of an on-the-job injury is subject to tax under the Act.
Summary: written with AI from the case record.
What it's about
It overturned the Eighth Circuit’s ruling and sent the case back to the lower court (remanded).
Justice Gorsuch’s dissent says Loos injured his knee after falling into a hidden drainage grate in a train yard, missed work for months, and later sued BNSF after it moved to fire him over attendance.
The dispute arose because BNSF treated part of Loos’s damages for missed work as taxable compensation.
Question presented
Whether a railroad's payment to an employee for time lost from work is subject to employment taxes under the Railroad Retirement Tax Act?
What the Court decided
Holding
A railroad’s payment to an employee for working time lost due to an on-the-job injury is taxable “compensation” under the RRTA. 865 F. 3d 1106, reversed and remanded.
- Result
- Reversed
The vote
From the opinions
“Today, the Court agrees with the company. Respectfully, I do not.”
What's next
The Eighth Circuit will take up the case again and apply the Supreme Court’s ruling that the lost-work-time payment is taxable compensation.
Documents
Docket activity
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AI analysis generated: Case Briefing
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Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.