Wednesday, January 26, 2011

Benefits and taxes: gay couples and friendly employers

It used to be that modern, forward thinking companies could be recognized by whether or not they give benefits to the partners of same sex couples.

But that's a double edged sword. If you are married, the IRS views those benefits as a perk of the relationship. But if you are NOT married, federally speaking (and no gay couple is married in the eyes of the federal government, thanks to DOMA), the IRS views those benefits as taxable.

These days, the modern, forward thinking companies are increasing the pay of the gay employee to cover their additional costs incurred by covering their partners. From the NY Times:
A growing number of companies are covering the extra costs that same-sex couples pay for domestic partner benefits — and even more companies are thinking about it. …. A handful of companies cover those extra costs, but not until Google adopted that policy earlier this year did the movement to equalize benefits begin to gain traction. Apple is the latest boldface name to join the effort.

A provision within a draft of the health care overhaul bill would have eliminated the tax, but it was ultimately dropped. The Human Rights Campaign said it continued to work on getting a bill passed, but until that happens — if it ever does — employees or their employers must pay the extra tax. (Many companies will cover the costs only for same-sex partners, since opposite-sex couples have the option to marry.) …

The biggest deterrent, of course, is the cost. Many companies support efforts to eliminate the tax altogether, but they’re unwilling to cover the costs employees now face.
Okay, I'm really happy that the companies are doing this. Of course. But there's another sting to the tail, here, and that is that it entrenches a second class status for LGBT people, even if they are married: an asterisk by their name. I'm married, dammit, I have the license to prove it. There should be no difference in my treatment by the IRS.

And, on the other hand, it also gives LGBT a sort of a "bye" from the commitment of marriage.

My employer provides benefits for same sex partners. When I started this job a number of years ago, to prove the partnership, they required evidence of "co-mingled finances": both names on a lease, a joint checking account, or a common car ownership*. That's not marriage, that's co-habitation.

It's not enough for a straight couple, if they want benefits. But for LGBT people in many places, it's all they've got. How do we distinguish a faithfully committed MARRIAGE from a simple co-habitation? Unless we have marriage, we can't.

Marriage matters. LGBT people should have the same access as straights to marriage-associated benefits--and importantly, they should have to be married to get them.

*This was before marriage in CA, before Prop8, and at the beginning of Domestic Partnerships. And what's a DP, really? It's a form you download from the internet to give you 2nd class status. It has no meaning outside of the state. Even today many attorneys do not recommend LGBT people get DPs, because they are legally uncertain in many respects, and there are many cases of them being ignored. Until these cases are litigated, it isn't clear that they really WILL get you any rights. And of course, neither marriage nor DP gets you anything from the Fed, so you still have to pay $$$ for trusts etc etc.

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