Issue: The Tax Burden for Partner Benefits Federal Law treats • Spousal health coverage as tax-exempt wages/income • Partner health coverage as taxable wages/income Increases Employer Payroll Tax and Employee Income Tax burdensBusiness Coalition for Benefits Tax Equity
Issue: The Tax Burden for Partner Benefits In Numbers... Employee with a Employee with a Single Employee Spouse Domestic Partner Annual Employee Salary $32,000 $32,000 $32,000 Monthly Employer $335 $907 $907 Contributions for Benefits Annualized $4,020 $10,884 $10,884 10,884 - 4,020 = Imputed Income -0- -0- $6,864 32,000 + 6,864 = Taxable Income $32,000 $32,000 $38,864 Employee’s 2006 Tax Liability $3,155 $3,155 $4,710 Domestic partner vs. spousal benefits: nearly 50% increase in tax liabilityBusiness Coalition for Benefits Tax Equity
Tax Parity for Health Plan Beneficiaries Act • Would end the tax inequities that apply to employer-provided health insurance for domestic partners – House: Introduced 6/21/2011 • Rep. Jim McDermott (D-WA) • Rep. Earl Blumenauer (D-OR) – Senate: Introduced 6/2/2011 • Sen. Richard Hanna (R-NY) • Nan Hayworth (R-NY)Business Coalition for Benefits Tax Equity
Business Case for Support • Eliminates unfair taxation that hurts your bottom line and places an extra financial burden on employees • Eliminates administrative burdens of separate record keeping and imputed income calculations for partner benefits • Reinforces corporate reputation as a champion of workplace fairness – Drive recruitment and retention of dedicated, fair-minded employeesBusiness Coalition for Benefits Tax Equity
Join the Business Coalition “attract and retainhealth benefits have beenworkforce, of our effort to Domestic partner a qualified and diverse a key part and we are pleased to support Representative McDermott’s legislation that would end the tax penalties we and our employees face when we make these benefits available. ” – Julie Fasone Holder, corporate vice president for human resources, diversity & inclusion and public affairs at the Dow Chemical CompanyBusiness Coalition for Benefits Tax Equity
More than 80 businesses support...Aetna, Hartford, CT Diageo North America, Norwalk, CT Moodys Corp., New York, NYA.H. Wilder Foundation, St. Paul, MN The Dow Chemical Co., Midland, MI Morgan Stanley, New York, NYAlaska Air Group Inc., Seattle, WA Eastman Kodak Co., Rochester, NY Motorola, Schaumburg, ILAlcoa Inc., Pittsburgh, PA ERISA Industry Committee, Washington, DC Nationwide, Columbus, OHAMR Corp. (American Airlines), Ft. Worth, TX Ernst & Young, New York, NY Nike Inc., Beaverton, ORAmerican Benefits Council, Washington, DC Exelon Corp., Chicago, IL Ocera Therapeutics, San Diego, CAAmeriprise Financial Inc., Minneapolis, MN General Mills Inc., Minneapolis, MN PG&E Corp., San Francisco, CAAT&T Inc., Dallas, TX GlaxoSmithKline plc, Philadelphia, PA PricewaterhouseCoopers, New York, NYBank of America Corp., Charlotte, NC Goldman, Sachs & Co., New York, NY Project for Pride in Living, Minneapolis, MNBausch & Lomb Inc., Rochester, NY Google Inc., Mountain View, CA Prudential Financial, Newark, NJBest Buy Co. Inc., Richfield, MN Herman Miller Inc., Zeeland, MI Quorum Review Inc., Seattle, WABingham McCutchen LLP, Boston, MA Hewlett-Packard Co., Palo Alto, CA Replacements Ltd., Greensboro, NCBlueCross BlueShield of MN, Eagan, MN HSBC North America, New York, NY Russell Investment Group, Tacoma, WABoehringer Ingelheim USA Corp, Ridgefield, CT IBM Corp., Armonk, NY Sempra Energy, San Diego, CACapital One Financial Corp., Falls Church, VA ICMA Retirement Corp., Washington, DC Society for Human Resource Management (SHRM),Cardinal Health Inc., Dublin, OH Intel Corp., Santa Clara, CA Alexandria, VACarlson Companies, Minneapolis, MN J.P. Morgan Chase & Co., New York, NY State Street Corp., Boston, MACharles Schwab & Co Inc., San Francisco, CA JetBlue Airways Corp., Forest Hills, NY Texas Instruments, Dallas, TXThe Chubb Corp., Warren, NJ KPMG LLP, New York, NY The Depository Trust & Clearing Corporation, New York, NYCitigroup Inc., New York, NY Levi Strauss & Co., San Francisco, CA Thomson Reuters, New York, NYCNA Insurance, Chicago, IL Marriott International Inc., Bethesda, MD TIAA-CREF, New York, NYCollege & University Professional Association Marsh & McLennan Companies Inc., New York, NY for Human Resources, Knoxville, TN Time Warner Inc., New York, NY Massachusetts Mutual Life Insurance Co., Springfield, MACorning Inc., Corning, NY UBS AG, Stamford, CT Medtronic Inc., Minneapolis, MNCullen Weston Pines & Bach LLP, Madison, WI Verizon Communications Inc., New York, NY Merck & Co. Inc., New York, NYDay One, South Portland, ME Winston & Strawn LLP, Chicago, IL MetLife Inc., New York, NYDeloitte LLP, New York, NY World at Work, Washington, DC Microsoft Corp., Redmond, WADelta Air Lines Inc., Atlanta, GA Xerox Corp., Rochester, NY MillerCoors Brewing Co., Chicago, ILBusiness Coalition for Benefits Tax Equity
Business Coalition for Benefits Tax Equity • www.hrc.org/bcbte for latest information • Contact Derek Dorn of Davis & Harman LLP (202)662-2290 to join • E-mail email@example.com for a copy of these slidesBusiness Coalition for Benefits Tax Equity
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