Ernst & Young began offering its U.S. employees same-sex partner benefits in 2002. Those benefits are subject to extra taxes because the federal government, under the so-called "Defense of Marriage Act" (DOMA) does not recognize same sex couples for federal law purposes, including taxation. This month,E&Y announced that effective Jan 1 it would gross up the compensation to gay/lesbian employees who participate in its medical benefits program for the extra tax costs due to their inability to claim spousal benefits for same sex partners. See Ernst & Young LLP offers personnel new tax offsets on same-sex domestic partner health and welfare benefits in the US (Jan. 9, 2012). As the announcement notes, E&Y is the first of the so-called "big four" accounting firms to offer this tax gross up on same sex domestic partner health and welfare benefits.
It is good to see individual companies moving forward to address this equity issue that came about because of Congress's passage of DOMA. Even though the Obama administration announced that it would not defend DOMA in court because of a determination that it was unconstitutional, it remains on the books as the law governing filing of tax returns.
it is not clear how many other large companies nationally have taken this step. BNA's coverage of this matter refers to a "growing trend of companies that attempt to make up the tax losses of gay and lesbian employees who are taxed on their benefits." BNA Daily Tax RealTime, Jan 10, 2012. E&Y's announcement claims that there were only 30 for-profit employers that gross-up in these cases, based on studies done by the Human Rights Campaign.
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