State Taxes for Married Same-Sex Couples
(Posted on June 26, 2015 by )


gay_marriageIn light of the Supreme Court decision in Obergefell v. Hodges, employers that maintain plans covering employees in same-sex marriages who live in any of the states that previously did not recognize same-sex marriage will have to adjust state tax withholding and reporting for such employees. State Taxes and Married Same-Sex Couples Before Obergefell provides a handy chart for determining which states are affected.

EEOC: Discrimination based on sexual orientation or transgender status is prohibited sex discrimination
(Posted on May 12, 2015 by )


EEOCLogoFederal law contains provisions forbidding discrimination based on several classifications: race, sex, veteran status, etc. However, no federal law explicitly prohibits discrimination based on sexual orientation or transgender status. As a result, many employers in states which do not have their own legislation barring discrimination based on sexual orientation or transgender status have assumed that no laws prohibited such discrimination.

The Equal Employment Opportunity Commission (“EEOC”) has now called this assumption into question, by bringing several lawsuits treating discrimination based on sexual orientation or transgender status as a form of sex discrimination prohibited by Title VII of the Civil Rights Act of 1964. This issue is a focus of the EEOC’s Strategic Enforcement Plan for 2013-2016. Read more.

Family & Medical Leave Act regulations protect same-sex spouses, regardless of domicile
(Posted on February 23, 2015 by )


deptlaborImmediately after the Supreme Court’s decision in United States v. Windsor, the Department of Labor announced that for purposes of the spousal protections of the Family and Medical Leave Act of 1993 (FMLA), it would recognize a same-sex marriage only if it was legal in the jurisdiction of the couple’s domicile. It has now reversed that position, issuing final regulations which recognize a marriage a) within the United States, if it was valid in the state in which it took place, and b) outside of the United States, if it was valid in the jurisdiction in which it took place and if it could have been entered into in at least one state. The effective date for the final rule was March 27, 2015.

Update (June 26, 2015): This rule is in line with the Supreme Court decision in Obergefell v. Hodges, which has now recognized same-sex marriages nationwide.

Cafeteria Plans Need to Move Fast to Take Advantage of Year-End IRS Guidance
(Posted on December 16, 2013 by )


irsOn June 26, 2013, the Supreme Court issued the Windsor decision, striking down a provision in the federal Defense of Marriage Act which had precluded recognition of same-sex marriages. In September, the Internal Revenue Service (“IRS”) announced that same-sex couples legally married in a state that recognized such marriages would now be treated as married for purposes of federal taxation, regardless of whether their marriages were recognized by their state of residence. The IRS announcement was made retroactive, meaning that such marriages will be recognized back to their inception.

The IRS has issued Notice 2014-1, which provides guidance on the application of the new rules to cafeteria plans. However, in many instances employers will need to move quickly to take advantage of relief granted.

Read more

Businesses Denied State Income Tax Deductions for Fringe Benefits for Same-Sex Spouses
(Posted on December 4, 2013 by )


gay_marriage

The below article has now been rendered obsolete by Bostic v. Schaefer (4th Cir. 2014), cert. denied (2014), which struck down the ban on same-sex marriage in Virginia and by the Supreme Court’s later decision in Obergefell v. Hodges, which struck down all bans on same-sex marriage.

As discussed in the chart, “State Taxes and Married Same-Sex Couples,” most states that do not recognize same-sex marriage are requiring same-sex married couples to file their tax returns as single (or head of household, if they qualify for that status). However, Virginia has now gone further, denying certain Virginia businesses state income tax deductions for fringe benefits they provide to same-sex spouses. As discussed below, the language used is muddy, and the holding is probably considerably less broad than it appears. However, businesses in Virginia need to be aware of its potential effect on them. And to the extent that other states take the same route, businesses in states other than Virginia would also be affected.

Read more

New article: Supreme Court Same-Sex Marriage Decisions Create New Rules for Employee Benefit Plans
(Posted on October 4, 2013 by )


SCOTUSCarol V. Calhoun‘s article, “Supreme Court Same-Sex Marriage Decisions Create New Rules for Employee Benefit Plans,” has now been published in Baltimore OUTloud. The article discusses the effect of the Supreme Court’s decisions regarding the Defense of Marriage Act and the subsequent guidance by the Internal Revenue Service and the Department of Labor on employee benefit plans.