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bigduckontax
bigduckontax, Accountant
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Would an arbitration settlement in respect of disputed employee

Customer Question

Would an arbitration settlement in respect of disputed employee pay arrears be allowable as a deduction for tax purposes?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
An arbitration is precisely that, it is a method of setting disputes quickly and cheaply outside a Court's jurisdiction. Under normal circumstances arbitration awards are akin to damages and such items are not allowable against tax. However, there are some instances in which the award is allowable and incorrect wages cases is one of these exceptions as such payments would normally be allowable anyway and the award merely an adjustment to the payroll position.
I do hope that I have been able to resolve your problem for you.
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Expert:  bigduckontax replied 2 years ago.
Thank you for your excellent support.