The U.S. Treasury Department and Internal Revenue service recently issued additional guidance regarding the Supreme Court's ruling on the Defense of Marriage Act and UC Human Resources has completed its operational review of changes required as a result of the June 26 ruling. As a result, HR can now provide additional information regarding taxes and UC benefits for employees and retirees affected by the ruling.

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Per IRS guidance, changes to federal tax treatment apply to all same-sex married couples, regardless of where they live. In light of that guidance, UC will continue to update records for those who identify themselves as having a same-gender spouse and taxes will no longer be withheld on the value of UC's contribution to benefits for a spouse and/or a spouse's children.

The IRS has also issued initial guidance regarding individuals' ability to recoup taxes paid in previous years. Employees and retirees are now able to reclaim taxes for open taxable years—usually up to three years. They will be able to recoup both income tax and FICA taxes (social security and Medicare).

Typically, employers apply for refunds of FICA taxes on behalf of employees and the IRS provides a process to follow. However, UC and other employers do not yet have the necessary instructions for reclaiming FICA taxes. Until those instructions are released, UC is not able to provide amended W2 forms for employees.

An employee's tax advisor could provide guidance on reclaiming income tax without a revised W2 form.

UC HR has also created the chart below to provide information on the effect of the DOMA ruling on all UC benefits for employees and retirees with a same-gender spouse. The ruling and benefits changes do not apply to same-sex domestic partners.

Benefits If you married prior to Supreme Court ruling If you marry after the Supreme Court ruling
Taxes on imputed income
  • UC's contribution to health insurance for an employee's or retiree's spouse and for the spouse's covered children is no longer taxable.
  • The employee portion of the cost of covering a spouse and his or her children can be deducted on a pre-tax basis.
  • Employees and retirees must self-identify by submitting a UPAY 850 (employees) or UBEN 100 (retirees) form in order to be sure they are no longer taxed. (Be sure to sign the form.)
  • UC is awaiting further guidance regarding recouping FICA taxes. UC will assist employees and retirees in understanding their rights once the guidance is clear.
  • If your domestic partner was enrolled in your benefits prior to your marriage, you will need to submit a UPAY 850 (employees) or UBEN 100 (retirees) form to indicate he or she is now your spouse in order to no longer be taxed on imputed income. (Be sure to sign the form.)
  • If you enroll your spouse in benefits, you will be required to submit documentation as part of UC's family member eligibility verification process.
Health Insurance Coverage and Special Enrollment Period
  • You may enroll your spouse and other eligible family members in UC benefits through the end of 2013. Coverage is effective as of the date on the enrollment form. Note: you will be asked to identify your spouse's gender so that your health plan can provide appropriate benefits, such as free men's and women's preventive health care screenings.
  • You may also enroll your spouse and eligible family members during any Open Enrollment. Benefits are effective Jan. 1, of the following year.
  • If your spouse is enrolling you in his or her employer's health plan, you may de-enroll from (employees) or suspend (retirees) UC coverage.
  • You may enroll your spouse and eligible family members in UC benefits within 31 days of your marriage date. Benefits are effective as of the date of the marriage. Note: you will be asked to identify your spouse's gender so that your health plan can provide appropriate benefits, such as free men's and women's preventive health care screenings.
  • You may also enroll your spouse and other eligible family members during any Open Enrollment. Benefits are effective Jan. 1 of the following year.
  • If your spouse is enrolling you in his or her employer's health plan, you may de-enroll from (employees) or suspend (retirees) UC coverage.
Health Flexible Spending Account
  • Your spouse's medical expenses can now be paid from a Health FSA from the effective date of enrollment.
  • An employee can enroll in the Health FSA or elect a mid-year increase in contributions.
  • If your spouse is enrolled in his or her employer's Health FSA, you can de-enroll from the UC Health FSA or elect a mid-year decrease in contributions.
  • Your spouse's medical expenses can now be paid from a Health FSA beginning with the effective date of enrollment.
  • An employee can enroll in the Health FSA or elect a mid-year increase in contributions.
  • If your spouse is enrolled in his or her employer's Health FSA, you can de-enroll from the UC Health FSA or elect a mid-year decrease in contributions.
Dependent Care Flexible Spending Account
  • Your same-sex spouse's earned income is now considered in determining how much you can contribute to the DepCare FSA.
  • Your spouse must be working, going to school or looking for work for you to be eligible for the DepCare FSA.
  • An employee who marries can enroll or make a mid-year change in contributions.
  • Your same-sex spouse's earned income is now considered in determining how much you can contribute to the DepCare FSA.
  • Your spouse must be working, going to school or looking for work for you to be eligible for the DepCare FSA.
  • You can enroll or make a mid-year change in contributions.
COBRA coverage for same sex spouse
  • COBRA coverage is now legally required
  • No change for UC since we already provide this coverage
  • No tax implications because payment for COBRA coverage is made on an after-tax basis.
  • COBRA coverage is now legally required
  • No change for UC since we already provide this coverage
  • No tax implications because payment for COBRA coverage is made on an after-tax basis.
Distributions to beneficiaries
  • Same-sex surviving spouses are no longer treated as "non-spouse" beneficiary for purposes of rollover rules
  • Same-sex surviving spouses are no longer treated as "non-spouse" beneficiary for purposes of rollover rules
403(b) Hardship Withdrawals
  • A same-sex spouse no longer needs to be the primary beneficiary of the plan in order to use the spouse's medical or educational expenses as the basis for a hardship withdrawal.
  • Fidelity Retirement Services is analyzing what's needed to implement the change.
  • The effective date of the change is not yet known.
  • A same-sex spouse no longer needs to be the primary beneficiary of the plan in order to use the spouse's medical or educational expenses as the basis for a hardship withdrawal.
  • Fidelity Retirement Services is analyzing what's needed to implement the change
  • The effective date of the change is not yet known.
W-4 form
  • You may change your marital status on your W-4 form at any time by signing into your account on At Your Service Online.
  • You may change your marital status on your W-4 form at any time by signing into your account on At Your Service Online.