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MIT adopts new policy to mitigate federal tax burden for same-sex couples

Institute to provide supplemental payment of $1,500 to cover imputed income tax.
An image from the LBGT@MIT 'You Are Welcome Here' campaign.
An image from the LBGT@MIT 'You Are Welcome Here' campaign.

MIT has adopted a new policy to help employees with same-sex spouses who are required to pay federal income tax on the value of their spouses’ health insurance.

The policy addresses an imbalance resulting from differing state and federal policies on same-sex marriage: While same-sex marriage has been legal in Massachusetts for nine years, the 1996 Defense of Marriage Act (DOMA) requires the federal government to count the value of medical coverage for a same-sex spouse as taxable income. In contrast, employees with opposite-sex spouses do not pay federal income tax on the value of spousal medical coverage.

Under MIT’s new policy, which is retroactive to Jan. 1 of this year, the Institute will provide a supplemental payment of $1,500 per year ($125 per month) to each employee who has a same-sex spouse; covers his or her spouse under one of MIT’s medical plans (Traditional, Choice or PPO), and pays imputed income tax on the value of the spouse’s medical coverage. The new policy does not cover unmarried domestic partners. Application to bargaining-unit employees is being discussed with union representatives.

MIT Human Resources is now working with the Institute’s payroll department on implementation, which will include an adjustment retroactive to Jan. 1 of this year. MIT joins a growing number of employers in offering such reimbursement to employees with same-sex spouses.

The change in policy has been in the works for nearly a year and a half, dating to a meeting of the MIT Lesbian, Bisexual, Gay and Transgender (LBGT) Issues Group and MIT’s director of benefits, Maureen Ratigan, to discuss the “imputed income tax.”

Together, the LBGT Issues Group — an advocacy group made up of faculty, staff and students — mapped out a plan for presentation to the Institute’s Employee Benefits Oversight Committee (EBOC), chaired by Vice President of Human Resources Alison Alden. The EBOC unanimously recommended a policy designed to help address this inequity. In February, Provost Chris Kaiser and Executive Vice President and Treasurer Israel Ruiz approved the EBOC recommendation.

The U.S. Supreme Court is expected to rule any day now on DOMA’s constitutionality. Regardless of how the court rules, MIT will implement its new policy from Jan. 1 of this year until there is no longer a federal requirement to impute income.

MIT employees with same-sex spouses applaud the Institute’s new policy.

“It means MIT treats all married members of the MIT community fairly and equally,” says Chris LaRoche, a usability consultant in Information Services & Technology.

Eleanor Shavell, an analyst programmer in the Office of Sponsored Programs, adds, “It makes me proud to wear my MIT hat.”

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