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Most Same-Sex Registered Domestic Partnerships in Washington State Deemed Marriages as of June 30, 2014

Same-sex couples under the age of 62, who had not previously taken action to convert their Washington state registered domestic partnership to a marriage, are deemed married as of June 30, 2014.  However, for purposes of Washington state law, the legal effective date of the deemed marriage will be the date the couple originally entered into their registered domestic partnership.  Employers and plan sponsors should consult with benefits counsel to properly implement this change of an employee’s marital status for income tax withholding and other employee benefit plan purposes, for example, to determine whether beneficiary designations of someone other than the employee’s former domestic partner, now spouse, remain valid. A copy of a notice from the Washington Secretary of State’s office discussing this change can be found here.  A copy of the Washington state law authorizing same-sex marriages and the conversion of domestic partnerships to marriages can be found here.

DOL Says Same-Sex Marriages are Marriages for ERISA Plan Purposes

The U.S. Department of Labor (“DOL”) recently announced that the terms “spouse” and “marriage” would include same-sex couples lawfully married in any state or foreign jurisdiction that recognizes same-sex marriage, regardless of the current state of residence.  This is consistent with the position recently announced by the IRS in Revenue Ruling 2013-17.  According to the DOL’s technical release, future guidance is forthcoming on specific ERISA provisions. Technical Release 2013-4 can be found here.

Procedures Announced for Employers to Correct Overpayments of Employment Taxes Related to Benefits Provided to Same-Sex Spouses

The IRS announced two special procedures for employers to correct overpayments of employment taxes made in 2013.  The first procedure allows employers to use the fourth quarter 2013 Form 941, Employer’s Quarterly Federal Tax Return, to correct the overpayment of FICA and federal income tax withholdings made during the first three quarters of 2013.  The second procedure allows employers to file one Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, for the fourth quarter of 2013 to correct the overpayment of FICA taxes during all quarters of 2013.  For the overpayment of FICA taxes in years prior to 2013, employers may make a claim or adjustment for all four calendar quarters of a specific year by filing one Form 941-X.  The employer can file a Form 941-X filed for the fourth quarter of a specific year if the year is still open under the statute of… Continue Reading

Important Changes Related to Benefits for Same-Sex Spouses Became Effective Monday, September 16, 2013

Effective September 16, 2013, same-sex spouses will be treated the same as opposite-sex spouses for all federal income tax purposes.  This means that employers should no longer impute income to employees for the value of certain benefits provided to their same-sex spouses and that qualified retirement plans, such as 401(k) and defined benefit pension plans, must extend spousal benefits and protections to same-sex spouses.  For example, as of September 16, 2013, a qualified retirement plan must, among other things, provide same-sex spouses a qualified joint and survivor annuity payment option and treat a same-sex spouse as an employee’s default beneficiary, absent the same-sex spouse’s written consent to naming another beneficiary. A copy of the relevant IRS guidance can be found here.

IRS Says Same-Sex Marriages Are Marriages for Tax Purposes No Matter the State of Residence

Recently, the IRS and Treasury Department announced that same-sex couples would be treated as married for all federal income tax purposes if the couple was legally married in a state or jurisdiction that recognizes same-sex marriage (regardless of their state of residence).  This is consistent with the IRS’s treatment of common law marriages as set out in IRS Revenue Ruling 58-66.  Rev. Rul. 2013-17 can be found here.

The Demise of DOMA’s Core: Employer Response Avenues in the Wake of Windsor

Since the ruling in United States v. Windsor on June 26, 2013, employers have been trying to determine what this means for their employees and their employee benefits.  While many unanswered questions remain, there are some actions employers can take now.  You can find our recent alert discussing the Windsor decision, the issues facing employers and plan sponsors, and steps employers can take now here.

First Circuit Finds DOMA Unconstitutional

In a unanimous decision, a three-judge panel of the U.S. Court of Appeals for the First Circuit held that Section 3 of the federal Defense of Marriage Act was unconstitutional. Section 3 denies federal economic and other benefits to legally married same-sex couples and to surviving same sex spouses. The court found that federalism bars Congress from interfering with states that opt to legalize same-sex marriages. A copy of the opinion is available here.

California Federal District Court Finds DOMA Unconstitutional

A federal district court in California recently held that the Defense of Marriage Act (“DOMA”) unconstitutionally discriminates against same-sex married couples. In the case, the plaintiff, who was employed by the U.S. Court of Appeals for the 9th Circuit, challenged the denial of health insurance coverage for her same-sex spouse. The same-sex couple had married on August 21, 2008 during the period that same-sex marriage was permitted under California law. The district court granted summary judgment to the plaintiff on her claim that Section 3 of DOMA violated her 5th Amendment right to equal protection of the law. In its decision, the court determined that a previous 9th Circuit decision was no longer binding precedent and instead ruled that discrimination based on sexual orientation is considered a suspect or quasi-suspect class which is entitled to a heightened scrutiny standard of judicial review. The court’s decision found that DOMA does not… Continue Reading

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