The recent decision by the U.S. Supreme Court’s overturn the 1996 Defense of Marriage Act (DOMA) cleared the way for same-sex couples to receive federal marriage benefits. This decision applies to 12 states and Washington D.C. where those marriages were currently recognized. For more information on this topic, please click here If your business resides in one of these states, it could mean that your business needs to make adjustments in terms of employee benefits packages or tax liabilities. “Anytime the Supreme Court or Congress makes major changes to a law, there is a lot of work that happens behind the scenes to ensure the changes are understood and implemented correctly,” says Martin Mucci, president and chief executive of payroll and human-resource outsourcing company Paychex. According to Paychex, changes will depend on where your business is located but here are a few areas that may require updates: Health insurance plans: The cost of an employee’s health-insurance coverage can be deducted from their income before taxes. With the DOMA ruling, employees will now be able to deduct the cost of their same-sex spouse’s health-insurance costs, just like opposite-sex spouses can. Flexible spending: Same-sex spouses will now be eligible to set aside pre-tax money into these accounts, which helps reduce the employee’s tax bills. Tax liability: As a business owner, many of your tax liabilities are calculated based on the taxable income of your employees. If the total taxable income of your employees decreases because they are able to deduct the cost of their same-sex partner’s health insurance and flexible spending plans, the business’s tax bill will also decrease. Employee time off: The Family Medical Leave Act protects an employee’s job for up to 12 weeks of unpaid leave to take care of immediate family, such as a spouse. The DOMA ruling could increase the amount of time off taken by employees. Over the next few weeks and months, additional information from federal agencies, the IRS and individual states should help in clarifying regulations and provide guidance for other same-sex tax benefits.
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