Adding Same-Sex Spouses - State Taxation Question

Hi -

We are extending benefit coverage to same sex spouses, starting effective 1/1/2014. The Feds have announced that same sex spouses are to receive the same favorable tax treatment for plan premiums, so we don't have to do the whole after-tax portion of the premium and the imputed income.

However, we are in Kentucky, a state that doesn't recognize same-sex marriages, so we could be looking at a situation where we would treat the same sex spouse portion of the premium as pre-tax for federal taxes, but after-tax for state taxes. (We also have employees in Indiana and Ohio - states that also don't recognize same-sex spouses.)

I've set up domestic partner benefits in a prior life...but, that was pretty straight-forward since there was no favorable tax treatment for federal taxes, much less state taxes. So...is there anyone out there that may already be working through this type of situation that could provide "tips and tricks" on how best to address this in Lawson (pre-tax federal, after-tax state, with imputed income for state)?

Thanks.

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Comments

hayden

I have the same question/situation. Does this need to go thru BSI or does a separate set up need to be done ?

unknown

I had to manually run a report out of Lawson and then Crystal reports to show anyone that had benefit coverage for a domestic partner. They had to be coded as such on the dependent screen in Lawson. Once the report was run we manually calculated the amount of imputed income based on the plan selection and then sent that over to payroll on a monthly basis where they addid it into payroll like they would with GTL.
We weren't able to find any Lawson set up or canned report that generated the information we needed to calculate imputed income for DPs.

linda-telles

I have a little cheat sheet formula for calculating the inputed income that i received from our Broker if you email me i'll be happy to send it to you.

Also instead of sending to payroll once a month we created a pay code similar to the GTL and just keep the amount keyed in the PR30.1 and we just update it every year as the rates change.

I use add-ins to pull the domestic partner coverage by pulling anyone with an after tax deduction since those are the only employees that have the field populated.

unknown

Has anyone figured out how to have the premium pre-tax for federal and after-tax for state (for just the same sex spouse portion)? I think the imputed income we'll do manually, as both Linda and Lengerich have suggested. It's the deduction that still has me in the dark...

linda-telles

We have it set up to take two deductions one that is pre-tax and one that is after tax. In BN32.1 we key in a dollar amount into the Pre-Tax field and a dollar amount in the After-Tax field.

unknown

Linda,

Are the pre-tax and after-tax amounts the same? How does your setup prevent the employee from having double the deduction? I must be missing something basic in the setup.

d-wilcox

Hey Linda, send it to me also. I still have a few on our books.

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