As communicated to you in June, as a result of the Supreme Court’s Windsor decision, which overturned key parts of the Defense of Marriage Act (DOMA), same sex spouses are no longer subject to imputed income for their spouse’s health insurance. The IRS recently issued guidance and Frequently Asked Questions on this topic. Employees with same sex spouses who were covering their spouses on their health insurance (and therefore paying taxes on the value of that insurance) have the option of refiling taxes from past years, though they are not required to do so. For further information, click here.
For your information as you determine how to handle this IRS guidance, upon request only, the state will issue W-2cs (that is, corrected W-2s, for affected employees) and corrected 1099-Rs (for affected retirees) covered under the HR/CMS and UMass payroll systems. Because refiling is optional, the state does not intend to distribute corrected forms, except upon request. With regard to 2013 income tax withholding, the state will not refund already-collected withholding amounts, but rather will leave it to employees to claim any refunds from the federal government when they file their returns. The state will also inform employees that they may request corrected W-2cs (1099-Rs for retirees), and that they may wish to revise their W-4 filing to adjust the amount withheld from their paychecks based on marital status. Finally, the state is reviewing its qualified retirement plan to assure appropriate treatment of same-sex spouses.
We hope this information is helpful as you weigh your options.
This information provided by the Group Insurance Commission.