Google announced it will offset a tax liability same-sex couples incur that opposite-sex couples do not, according to the San Jose Mercury News.
When a company offers domestic partnership benefits, those perks — such as health insurance for a partner — are taxable as income.
When I looked at the cost of going on my domestic partner’s health insurance, it would have been more expensive than buying a policy for myself as an individual. The domestic partner “benefit” amounted to an almost $200-per-month penalty.
Google is doing something about it. The company is paying the tax penalty incurred by gay and lesbian employees by increasing their compensation.
Among the requirements to receive a perfect rating on the Human Rights Campaign’s Corporate Equality Index, a company must offer domestic partnership benefits. The company through which I would have received benefits has a score of 100 percent on the CEI, despite the fact that signing up for those benefits would have cost me more than $2,000 per year in tax liabilities that an opposite-sex married couple would not have to pay.
One company offering a benefit does not indicate a trend. However, Google competes for a pool of talent in Silicone Valley, and other companies are expected to look at this benefit seriously.
A permanent fix for this inequity would be to change the law to recognize and treat same-sex marriages the same as opposite-sex marriages.
Although in my case the difference would have been higher, HRC estimates the difference in tax burden at $1,069 per year. If Google does compensate an employee only that amount to cover the tax cost of the benefit, that employee is now liable for taxes on the $1,069 as well.
Google is trying to equalize the burden on their employees. HRC should demand that for any company to receive a 100 percent rating, they do the same.