Following the Supreme Court decision invalidating Section 3 of the Defense of Marriage Act (DOMA), the Internal Revenue Service (IRS) issued a ruling that legally married same-sex couples are now entitled to the tax benefits long accorded legally married opposite-sex couples.
The IRS has subsequently issued guidance granting refunds for any taxes paid prior to the June DOMA decision for an employee's same-sex spouse who received benefits under the employer's medical and welfare benefit plans.
Accordingly, employers have until Dec. 31, 2013, to repay or reimburse their employees for their portion of any FICA (Federal Insurance Contributions Act) or federal income tax collected from their pay for the cost of covering their same-sex spouse during the first three quarters of calendar 2013. Employers will be allowed to reduce their fourth-quarter employee tax obligations to compensate for the refunds. (An alternative method is also available.)
As usual, restrictions and qualifications apply, so employers will need to check with a tax accountant or the IRS for details. The refund guidance is contained in recently issued IRS Notice 2013-61.