Update: Faculty, staff and retirees who are legally married with a same gender spouse are now able to reclaim income taxes for open taxable years—usually up to three years. Note: the ruling and benefits changes do not apply to same gender domestic partners. The IRS has issued guidance regarding the Supreme Court’s ruling on the Defense of Marriage Act (DOMA) and individuals’ ability to recoup taxes paid in previous years. With guidance in place, UC has now set a process for helping employees and retirees recoup back taxes.
On July 26th, UC Office of the President (UCOP) published "UC taking steps to implement changes resulting from Supreme Court's DOMA, Prop 8 rulings", outlining the implementation of changes to benefits and payroll taxes as a result of the Supreme Court rulings on California's Proposition 8 and the federal Defense of Marriage Act (DOMA).
These changes include:
- Employees in same-gender marriages are no longer subject to taxes on the imputed income for UC's contribution to the cost of healthcare coverage for a same-gender spouse enrolled in UC-sponsored benefits.
- An employee's portion of the health insurance premium may be deducted on a pretax basis rather than on an after-tax basis.
The rulings do not affect same-gender domestic partners.
UC's immediate priorities are:
- Making programming changes to payroll and HR systems necessary to implement the tax changes
-- Work has begun on this front, and is expected to be completed by mid-September - Assisting employees when that guidance becomes clear
-- Retroactivity of the tax changes is of critical importance, and once federal guidance has been issued, we will support employees and help them navigate these issues - Encouraging faculty and staff who were married prior to the rulings to self-identify as soon as possible, to ensure they benefit from the changes
-- Employees can submit a completed UPAY 850 form (PDF) that includes your personal information, marriage date, your spouse's information, and/or any action you are taking. Please be sure to sign and date the form and submit it to Berkeley Regional Services, either via campus mail (mail code 7600), email (hrapscsshelp@berkeley.edu) or fax (510-664-9318). Please see the special enrollment period guidelines below. - Getting guidance from federal agencies on the effective date of the change
Special Enrollment Period for UC Health Benefits
Employees and retirees may enroll their same-sex spouse in UC health benefits, or in some cases, change the plans in which they are enrolled, as follows:
- If an employee or retiree marries their same-gender domestic partner who is not currently covered by UC's health and welfare programs, the employee or retiree may enroll in and/or add their new spouse and eligible family members to health and welfare plans within 31 days of the marriage. Coverage is effective on the date of marriage.
- If a same-gender spouse married prior to the Supreme Court rulings is not currently covered by UC's health and welfare programs, the employee/retiree has a period of eligibility to enroll in and/or add their same-sex spouse and eligible family members in health and welfare plans due to changes in tax treatment. Coverage is effective on the date of receipt of the enrollment form.
- If same-gender spouses married prior to the Supreme Court rulings, or same-gender domestic partners married after DOMA, are currently covered by UC's health and welfare programs, the employee or retiree may change plans now and/or add eligible family members due to changes in tax treatment. This is a limited eligibility period applicable only to medical, dental, vision, Health and Dependent Care Flexible Spending Accounts. Coverage is effective on the date of receipt of the enrollment form.
In all of these cases, taxes on imputed income will be deducted until payroll system programming changes have been completed. Benefits and payroll offices will retain copies of the enrollment forms so that once the system is updated, the employee record can be changed to allow for accurate tax treatment.
Newly-married couples will be required to submit proof of their marriage, per UC's family member eligibility verification process. UC is working with Secova, the eligibility verification administrator, to exempt previously verified couples from the documentation process.
Other issues
Other outstanding issues related to taxes and benefits still need to be resolved either through guidance from the federal government or through changes in UC processes. These include:
- Will the federal law apply for employees and retirees living in states that do not permit same gender marriage?
- Will the tax changes be retroactive?
- What additional operational and policy changes does UC need to make to address benefits enrollment and eligibility changes needed as a result of the Supreme Court rulings?
More information
Questions can be directed to Berkeley Regional Services (BRS) at 510-664-9000, option 3.