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EEOC Orders Air Force To Pay $296,175 For Increased Tax Burden Due To Back Pay Award

by | May 31, 2024 | Case Results

In Doyle T. v. Department of Air Force, Petition No. 2023004214 (May 21, 2024), the Commission found the Petitioner provided sufficient documentation to support that he incurred significant additional tax burden as a result of receiving back pay beginning in April 2014 and going through October 2023. The Petitioner previously prevailed on a claim of disability discrimination when the Air Force denied his request for accommodation and ultimately withdrew its offer of employment. The Petitioner received $300,000 in non-pecuniary compensatory damages, $77,811.59 in pecuniary compensatory damages, and reinstatement, in addition to the back pay award.

When back pay is awarded in a lump sum, individuals can receive compensation for the extra tax required to pay as a result of receiving the award in one tax year, as opposed to the actual amount of taxes the individual would have paid if they had received the back pay over a period of time. Here, the Petitioner recovered $296,175 in increased tax liability due to receiving a lump sum of back pay of $364,062.90.

The Commission also reminded the Air Force that although the Defense Finance Acounting Service held responsibility for conducting the back pay calculations and issuing the payments, the Air Force “is still required to comply with the Commission’s orders even where another entity has failed to complete the action.”

Gilbert Employment Law, P.C. represented the Petitioner in this matter. If you are seeking representation for obtaining compliance with a back pay award, or to submit evidence of tax liability due to the payment of a back pay award, contact us here to discuss potential representation.