DOMA consideration triggers FICA claims

April 2013


Employers may need to react now, despite the fact that the US Supreme Court has not yet ruled on the validity of the US Defense of Marriage Act (DOMA). The US Supreme Court heard oral arguments on March 27, 2013 in US v. Windsor, which considered the validity of Section 3 of the DOMA, enacted in 1996. Implicated by this case is the determination of whether certain benefit payments, such as employer-paid health care coverage and group-term life insurance premiums, are taxable wages. If the US Supreme Court upholds the earlier decision by the US Court of Appeals for the Second Circuit, employers may be able to request a refund of FICA taxes paid, by both employers and employees, on the imputed income attributable to certain benefit payments. These benefit payments were originally ineligible for exclusion because they were provided to or on behalf 0f their employees’ same-sex spouses.

While the matter is pending in the US Supreme Court, the deadline is fast approaching for employers to protect their right, and those of the affected employees, to a refund of FICA taxes on certain payments made during the 2009 tax year.

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