By: Mensing Consulting Solutions
“DOMA” is the Defense of Marriage Act which defines marriage as a union between one man and one woman. Recently, the Supreme Court found Section 3 of it (the section pertaining to the Federal government’s non-recognition of same sex marriage) to be unconstitutional. Prior to DOMA’s passage in 1996, the Federal government had no definition of marriage. The Federal government recognized any marriage that a State recognized, even if other states didn’t recognize the marriage. i.e. if State A didn’t recognize a marriage from State B, the Feds still recognized State B’s marriage.
13 States and the District of Columbia recognize same-sex marriage. Illinois recognizes legal unions between same sex partners. What does this mean in terms of nuts and bolts for your business? For one, employees may need or wish to change tax withholding. Depending on the state, withholding for Federal taxes could be at the married rate for Federal, and single rate for State. Thus if an employee now expects to file as married for Federal tax purposes, he or she may recalculate the expected tax bill and change withholding accordingly. However, remember that any employee can change withholding at any time for a variety of reasons, and can adjust their expected withholding by changing the withholding rate, or the withholding amount. The desired final result is to end the year with the amount of tax withholding, both Federal and State, that meets the employee’s wishes.
Additionally, employers should review their plan documents and fringe benefits to include same sex spouses in such areas as FLMA, health insurance and COBRA. Retirement plans are also affected since marriage affects spousal consent, beneficiaries, and rights upon divorce. Ask your plan administrator if your plans are up to date with the new DOMA ruling.
“DOMA” is the Defense of Marriage Act which defines marriage as a union between one man and one woman. Recently, the Supreme Court found Section 3 of it (the section pertaining to the Federal government’s non-recognition of same sex marriage) to be unconstitutional. Prior to DOMA’s passage in 1996, the Federal government had no definition of marriage. The Federal government recognized any marriage that a State recognized, even if other states didn’t recognize the marriage. i.e. if State A didn’t recognize a marriage from State B, the Feds still recognized State B’s marriage.
13 States and the District of Columbia recognize same-sex marriage. Illinois recognizes legal unions between same sex partners. What does this mean in terms of nuts and bolts for your business? For one, employees may need or wish to change tax withholding. Depending on the state, withholding for Federal taxes could be at the married rate for Federal, and single rate for State. Thus if an employee now expects to file as married for Federal tax purposes, he or she may recalculate the expected tax bill and change withholding accordingly. However, remember that any employee can change withholding at any time for a variety of reasons, and can adjust their expected withholding by changing the withholding rate, or the withholding amount. The desired final result is to end the year with the amount of tax withholding, both Federal and State, that meets the employee’s wishes.
Additionally, employers should review their plan documents and fringe benefits to include same sex spouses in such areas as FLMA, health insurance and COBRA. Retirement plans are also affected since marriage affects spousal consent, beneficiaries, and rights upon divorce. Ask your plan administrator if your plans are up to date with the new DOMA ruling.
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