Opinion ID: 1163156
Heading Depth: 4
Heading Rank: 1

Heading: Use of Internal Revenue Code

Text: Alaska Statute 23.30.220(a) provides in pertinent part: The spendable weekly wage of an injured employee at the time of an injury is the basis for computing compensation. It is the employee's gross weekly earnings minus payroll tax deductions. .. . Alaska Statute 23.30.265(23) defines payroll taxes as (A) the amount that would be withheld under withholding tables in effect on the January 1 preceding the injury under the Internal Revenue Code of 1954 as amended and regulations issued under the code, as though the employee had claimed the maximum number of dependents for actual dependency, blindness, and old age to which the employee is entitled on the date on which the employee is injured; and (B) the amount that is or would be deducted or withheld as of the January 1 preceding the injury under the Social Security Act of 1935 as amended.... Arnesen challenges the calculation of his benefits, claiming that he should be considered to have two dependent children even though his ex-wife has physical custody of the children and claims the children as dependents on her federal income taxes under the provisions of their divorce decree. He argues that, since he pays child support under Alaska Civil Rule 90.3, his children are dependents. [13] Arnesen's argument fails. The statute is clear. If Arnesen cannot claim the children as dependents under the Internal Revenue Code, then he may not claim them as dependents for the workers' compensation benefit calculation. The statute looks to the employee's spendable weekly wage at the time of injury. That is an objective number: gross weekly earnings minus payroll taxes as defined in AS 23.30.265(23). The statute is concerned with how much money he takes home every week, not with how best to characterize his relationship with his children. Arnesen also argues that under the definition of payroll taxes, his deductions are calculated as though the employee had claimed the maximum number of dependents ... to which the employee is entitled on the date on which the employee is injured. See AS 23.30.265(23). He reasons that, since he could have claimed the children as dependents if he and his wife had agreed that he could do so, his maximum number of dependents should include the two children. This argument is meritless. Under the statute, the maximum number of dependents ... to which the employee is entitled is one. He is not entitled to claim the children as dependents because I.R.C. § 152(e) does not allow him to. [14] We affirm the superior court's holding that the Board properly calculated Arnesen's benefits under the statute. [15]