Deloitte has begun adjusting salaries to offset the income taxes paid by Deloitte professionals who provide coverage to their domestic partners—both same sex and opposite sex—on their medical or dental plans, effective June 3.
Under IRS regulations, domestic partners do not qualify as tax dependents, so health care premium payments made by Deloitte on behalf of domestic partners are treated as taxable income. With this new domestic partner benefit, Deloitte will pay for the tax impact by grossing up salaries for the value of the premium provided to a domestic partner. As a result, there will be no impact to net pay.
Deloitte is joining a small but growing number of employers around the country in offering this benefit to their employees. Ernst & Young and KPMG recently announced plans to offer similar benefits (see Ernst & Young Provides Tax Break for LGBT Staff and KPMG Adds Tax Break for Same-Sex Partners).
Last week, a federal appeals court found the Defense of Marriage Act unconstitutional because it denies a variety of federal benefits to same-sex couples, including the ability to jointly file tax returns. One of the plaintiffs, Dorene Bowe-Shulman, estimated she and her spouse had to pay $100 more in taxes every month because she is taxed to be on her spouse's health insurance plan.
“This decision is great news not just for our gay, lesbian, bisexual, transgender, and heterosexual professionals who cover their domestic partners, but for all of Deloitte,” said Deloitte chief inclusion officer Deb DeHaas in a statement. “With a small but growing number of companies who offer this benefit, Deloitte is part of an elite group of progressive employers who are leading the way in creating a cultural change.”
Deloitte recently filmed a video for the It Gets Better Project highlighting LGBT employees in its U.S. and Canadian firms to remind young LGBT people that they are not alone (see Deloitte Contributes Video to It Gets Better Project).
"Our decision to provide this tax gross-up reinforces Deloitte's long-standing commitment to an inclusive and equitable culture and further strengthens an environment where leaders thrive," says Deloitte LLP chief talent officer Jennifer Steinmann.
The firm Deloitte has been recognized by several organizations for being a great place to work and for promoting diversity and inclusion, receiving Fortune's 100 Best Companies to Work For list for the 13th year, a top-10 ranking on the 2012 DiversityInc Top 50 Companies for Diversity, Deloitte's ninth year on the list, a 100 percent rating in the 2012 Human Rights Campaign Corporate Equality Index for the fifth consecutive year, and recognition on their Best Places to Work for Gay, Lesbian, Bisexual and Transgender Equality list, and top-10 ranking on the DiversityInc Top 10 Companies for LGBT Employees three times.
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