Google announced on Thursday that it will begin compensating gay and lesbian employees for an extra tax they must pay when their partners receive domestic partner health benefits — a tax that married straight couples are not required to pay.
From the San Jose Mercury News:
While a few organizations, such as Cisco and the Kimpton Hotel chain, have already begun to “gross up” their employees pay to address the disparity in how workplace health benefits for same-sex and heterosexual married couples are taxed, Google’s powerhouse status could fuel the trend, putting pressure on other employers to follow suit and on policy-makers to restructure how domestic-partner health benefits are taxed.
“Google is really taking a leadership role here,” said Daryl Herrschaft, director of the Workplace Project for the Human Rights Campaign in Washington, D.C. “This is a really important step for gay and lesbian employees because it eliminates a tax burden they’re subject to because their families aren’t recognized under federal law.”
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Under federal law, employer-provided health benefits for domestic partners are counted as taxable income, if the partner is not considered a dependent. The tax owed is based on the value of the partner’s coverage paid by the employer.
On average, employees with domestic partners will pay about $1,069 more a year in taxes than a married employee with the same coverage, reports The New York Times.
