Until the United States Supreme Court decision in United States v. Windsor, 570 U.S. ___ (2013), the Defense of Marriage Act (DOMA) required employers providing subsidized benefits to same-sex spouses and domestic partners/civil union partners (whether same-sex or opposite sex) to impute income on the subsidy relating to the spouse/partner benefits, and to pay Federal Insurance Contributions Act (FICA) taxes on that imputed income. If the employee paid an extra premium for the spouse/partner coverage under a cafeteria (section 125) plan, the extra premium amount attributable to the spouse/partner’s coverage had to be paid on an after-tax basis.
Articles Discussing Employee Benefits for Domestic Partners.
The Department of Labor has issued guidance to employee benefit plans, plan sponsors, plan fiduciaries, and plan participants and beneficiaries as to the impact the U.S. Supreme Court case United States v. Windsor has on benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). In Windsor, the Court addressed the Defense of Marriage Act (DOMA) and held as unconstitutional the section requiring federal laws to ignore same-sex marriages legally entered into under an applicable state law.
On September 18, 2013, the Department of Labor’s Employee Benefits Security Administration (EBSA) issued Technical Release 2013-04 (the “Release”), adopting the treatment of same-sex marriages for purposes of ERISA (and for purposes of the Federal Employees’ Retirement System) that was recently prescribed for tax purposes by the IRS. See our previous Alert dated September 3, 2013, IRS Answers Residence Question for Same-Sex Spouses, at http://www.fordharrison.com/9568.
After months of speculation, on August 29, 2013, the Internal Revenue Service published formal guidance on the treatment of same-sex spouses under the Internal Revenue Code. In Revenue Ruling 2013-17, the IRS confirmed that a same-sex couple will be considered married for federal tax purposes if the couple was married in any jurisdiction—including a foreign country—that recognizes same-sex marriage.