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Federal bill would end taxation of workplace benefits for unmarried beneficiaries

A story published today by 365gay.com reports that a bill to eliminate an extra tax burden on domestic partner workplace benefits has been reintroduced into Congress after dying last year.

The Domestic Partner Health Benefits Equity Act would treat all eligible beneficiaries in the same way as married couples are now exempted from taxation of workplace benefits.

The number of companies offering domestic partner benefits is growing rapidly but those taking advantage of it are hit with higher taxes. 

This bill, filed by Sen. Gordon H. Smith (R-Ore.) and Charles Schumer (D-NY), would amend the Internal Revenue Code (IRC) to treat those companies and their employees fairly. 

Under current law if an unmarried worker makes $40,000 a year and his partner’s insurance is valued at $200 a month, he actually will be taxed on $42,400 at the end of the year.

By comparison, a married person covering his or her spouse in the same situation would be taxed on only the $40,000.

Corporations that provide same-sex domestic partner benefits are supporting the bill.

"In this competitive global market, offering equal benefits to all employees helps us attract the best and brightest to work for us. This is a common sense, bottom line issue," said John D. Hassell, Director of Federal & State Government Affairs for Hewlett-Packard Company. 

"Nike has long been committed to diversity and inclusion and strives to treat our employees equally without regard to sexual orientation. We believe the U.S. tax code should do the same," said Brad Figel, Nike's Global Director of Government and Public Affairs.