brokenlinx
New Member
My wife was in an accident in April of this year. The other car's auto insurance took full responsibility. Over the past few months we have been going back and forth with them, gradually getting the settlement where is SHOULD be.
At this point, we have finally gotten them to cover her lost wages, but are now trying to charge 20% in taxes. When I asked him how they would report this to the IRS, he said that they didn't, but that's what her employer would have taken out had she been paid. My response was that, while her employer may take out 20%, we recover a portion of that on our tax return and suggested that they base it off of our 2007 effective tax rate. He told me that it is a state mandated tax rate lost wage in Texas. When I asked for documentation of this, he told me that I'd have to look it up in the Texas Tax Code. I have tried finding it, but can't find what I'm looking for.
Does anyone know if the state of Texas has this statute in place?
At this point, we have finally gotten them to cover her lost wages, but are now trying to charge 20% in taxes. When I asked him how they would report this to the IRS, he said that they didn't, but that's what her employer would have taken out had she been paid. My response was that, while her employer may take out 20%, we recover a portion of that on our tax return and suggested that they base it off of our 2007 effective tax rate. He told me that it is a state mandated tax rate lost wage in Texas. When I asked for documentation of this, he told me that I'd have to look it up in the Texas Tax Code. I have tried finding it, but can't find what I'm looking for.
Does anyone know if the state of Texas has this statute in place?
