Finally get that promotion? Get exclusive content, tips and tools to help you excel.
Implicit bias occurs when individuals make judgments about people based on gender, race or other prohibited factors without even realizing they’re doing it.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
On June 27, 2014, the IRS released
Information Letter 2014-0012, which contains guidance for employees who have had the value of same-sex spousal coverage under employer health plans—which until recently was required to be included in gross income—reported on their Forms W-2.
Historically, the employer cost of opposite-sex spousal coverage under employer-provided health plans is tax free (Treasury Regulations section 1.106-1), while the employer cost of same-sex spousal coverage resulted in taxable income to the employee. Further, the employee cost of opposite-sex spousal coverage could be paid for on a pre-tax basis through a cafeteria plan (I.R.C. section 125), while same-sex spousal coverage could only be paid for with after-tax dollars.
In its June 2013
United States v. Windsor decision, the U.S. Supreme Court declared Section 3 of the Defense of Marriage Act (DOMA)—which had prohibited the recognition of same-sex couples as spouses for federal tax law purposes—unconstitutional. Thereafter, the IRS issued guidance providing that same-sex spouses who were lawfully married under the law of any state—regardless of where those same-sex spouses resided—would be treated the same as opposite-sex spouses for federal tax purposes (Revenue Ruling 2013-17).
Subsequent IRS guidance clarified the tax treatment of the employer cost and the employee cost of same-sex spousal coverage: the former would not result in taxable income to the employee and the later could be paid on a pre-tax basis through a cafeteria plan (Notice 2014-1).
Information Letter 2014-0012
Information Letter 2014-0012 outlines two possible correction methods for an employee who has had the value of same-sex spousal health coverage reflected on a Form W-2:
Option One: The employee can ask the employer for a corrected Form W-2—that does not include the value of any excludable spousal health coverage in taxable wages—and use the corrected Form W-2 when filing the employee’s tax return.
Option Two: If the employer does not issue a corrected Form W-2, the employee can complete Form 4852 (Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.) pursuant to the instructions contained the Information Letter and file it with a completed Form 1040 and the uncorrected Form W-2.
The Information Letter also advises employees that they may be entitled to a refund of federal employment taxes (social security and Medicare) paid on the value of excludable spousal health coverage and provides two possible refund methods: an employer-sought refund and an employee-sought refund via Form 843 (Claim for Refund and Request for Abatement).
Key Take Away: Significantly, Information Letter 2014-0012 does notrequire employers to issue corrected Form W-2s or seek a refund of federal employment taxes. Accordingly, considerations of payroll department workload and employee relations can determine whether issuance of a corrected Form W-2 or the seeking of a refund is appropriate. Payroll departments who have not already done so should ensure their Form W-2 reporting and federal employment tax withholding aligns with
Windsor and subsequent IRS guidance.
Stephanie O. Zornis Of Counsel in the St. Louis office of
Jackson Lewis, a labor and employment law firm. © 2014, Jackson Lewis P.C. All Rights Reserved. Reposted with permission.
SHRM Seeks Clarification on DOL Proposed Rule Defining ‘Spouse,’SHRM Online Legal Issues, August 2014
More Post-Windsor Tax Guidance: IRS Issues Letter Outlining Steps for Individuals to Obtain Tax Refunds for Same-Sex Spousal Health Coverage, Proskauer’s ERISA Practice Center Blog, July 2014
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Join SHRM's exclusive peer-to-peer social network
SHRM’s HR Vendor Directory contains over 10,000 companies