An option exists to include or exclude taxes. The components may be entered through 'Taxes'.

Taxes can be calculated and applied in either of two ways.

• Up to three years of Federal, state and local tax payments can be used to calculate and sum to an overall rate.
• Rates can be calculated using statutory rates applicable to specified percentages of compensation. The resulting rate can be either simple or pooled. (Lower level taxes are normally deducted before calculating higher level taxes, when pooled is employed.)

Taxes are treated as separate adjustments to Lost or Impaired Earnings, if entered in the valuation system. If separate, an option exists to adjust Lost or Impaired Earnings for the amount of related Collateral Source Offset payments before applying the tax rate, thus reducing the impact of taxes on lost or impaired earnings.