§ 4546.Loss of earnings and impairment of earning ability in actions for medical, dental or podiatric malpractice.

Lost-earnings damages create an odd tax puzzle: a jury award for future lost wages is not itself taxable income, but the wages themselves would have been taxed if the plaintiff had earned them. In medical, dental, and podiatric malpractice cases, CPLR 4546 makes the court, not the jury, responsible for sorting that out.

The statute lets the court hear evidence, outside the jury's presence, of the federal, state, and local personal income taxes the plaintiff would have owed on the earnings claimed as lost. It then instructs the jury not to make that tax deduction itself when setting the loss-of-earnings award; the jury's job is to value the loss the plaintiff suffered. Instead, the court reduces the award afterward, if the evidence supports it, by the amount of taxes it finds, with reasonable certainty, the plaintiff would have had to pay.

The rule keeps two tasks separated: the jury decides what the plaintiff lost in earning capacity, and the court decides how much of that loss represents money the plaintiff would have kept after taxes. It applies only to medical, dental, and podiatric malpractice actions, not to personal injury cases generally.