After the Windsor decision and subsequent guidance from the Internal Revenue Service and Department of Labor, employers must provide the same benefits to same-sex spouses of employees who are legally married in a state that recognizes same-sex marriage that they do to spouses of opposite-sex married employees. Prior to this ruling, the cost of benefits to a same-sex spouse was taxable and generally calculated as imputed income to the employee. The employee had to pay tax on benefits provided to his or her same-sex spouse. Now, there is no different tax treatment for benefits paid to same-sex or opposite-sex spouses.
The IRS has advised that employers may retroactively apply the same-sex spouse ruling to prior years, and therefore may be reimbursed for the taxes paid on same-sex spouse benefits in the past. Employers may use the fourth quarter 2013 Form 941, Employer's quarterly Federal Tax Return to correct overpayments of employment taxes for the first three quarters of 2013. Alternatively, employers may file one Form 941-X, Adjusted Employer's quarterly Federal Tax Return or Claim for Refund, for the fourth quarter of 2013 to correct overpayments of FICA taxes for all quarters of 2013.
For overpayment of FICA taxes for years before 2013, employers can make a claim or adjustment for all four calendar quarters of a calendar year on one Form 941-X.
Employers who in the past extended benefits to same-sex spouses of employees but treated those benefits as taxeable to the employee might want to apply for reimbursement of tax overpayments.
