Supreme Court rules stock not ‘money remuneration’ taxable

June 2018

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Overview

On June 21, 2018, the US Supreme Court held, 5-4, that stock options granted to railroad employees are not ‘compensation’ subject to tax under the Railroad Retirement Tax Act (RRTA) because they are not ‘money remuneration,’ the term used in that law (Wisconsin Central Ltd. V. United States, No. 17-530 (2018)).

The Court concluded that when Congress adopted the RRTA in 1937, ‘money’ was understood as currency issued by a recognized authority as a medium of exchange; because stock is not so recognized, it is not ‘money remuneration.’  The case was remanded for further proceedings consistent with the opinion.

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