What you need to know:

Past loss of income.

  • ICBC wants to reduce my loss of income claim by 30% for taxes I would have paid. Is this the law? If I have to pay tax on my settlement or court award this would be double taxation.
  • The ICBC regulations says that past (not future) loss of income must be calculated on the injured person's net loss of income after deduction for taxes. Judges have interpreted this to mean that the amount of taxes to be deducted is based on your entire loss of income having been earned in the year before the court makes its award.

    As an example, if you lost $125,000 in gross income over a four year period before you went to court the judge will reduce this loss by the tax you would have paid on income of $125,000 in the year before the trial. This is in contrast to the reduction being what you would have been taxed on the amount you lost in each of the four years.

    Each year economists provide lawyers and ICBC with tables of tax to be deducted from various amounts of income.

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