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My facility is looking at an upgrade sometime next year that would be backdated into this year. Has anyone ever had this experience? Did you have to file an amended tax return or anything like that when you got the back pay?
FightingIrish2012
Legendary Member
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If you get the back pay in 2020 that is 2020 income for tax purposes. It don’t matter if it was “earned” in 2019, it only depends on when you received the income. Some private sector executives get “deferred compensation” where they receive money for work they did months or years ago if it is tax advantageous.
Roger_Roger
Trusted Contributor
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You were paid the money in the new year so it would be filed on the years tax return it was paid.
As for when the back pay starts, it's covered in the CBA (and having gone through an upgrade this year) it will be back paid to the first pay period the month after you first qualify for the upgrade. IE, your fac breaks the TCI in November, December, Jan. You get upgraded, first full PP in December is when the pay gets backdated to.
