Tax Type
Individual Income Tax
Description
Sick pay benefits paid under the Railroad Unemployment Insurance Act
Topic
Subtractions and Exclusions
Taxable Income
Date Issued
07-02-1986
July 2, 1986
Re: Ruling Request / Individual Income Tax
Dear *************
This is in reply to your letter of February 19, 1986 requesting a ruling regarding the taxability of sick pay benefits received from the ************************.
As is pointed out in the instructions for line 35 in the Virginia Individual Income Tax Instructions, the following may be subtracted from federal adjusted gross income: "The amount of Tier 2 and other Railroad Retirement Act and Railroad Unemployment Act benefits included in federal adjusted gross income". (Emphasis added.) The sick pay benefits that you question are paid under the authority of the Railroad Unemployment Insurance Act (45 U.S.C.A. §352 et al.). Section 352 (e) specifically prohibits states from taxing such benefits. Therefore, any amount of sick pay benefit received from the Railroad Retirement Board and taxable for federal income tax purposes under §105 (i) of the Internal Revenue Code, may be subtracted from federal adjusted gross income in computing Virginia taxable income.
This subtraction does not apply to any sick pay benefits received by employees of railroads under a company plan set up by a particular railroad.
I trust that this satisfactorily answers your question and if you have any more questions, please do not hesitate to contact me.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner