UC Sets Process for Tax Refunds as Result of DOMA Ruling
The IRS has now issued guidance regarding the Supreme Court’s ruling on the Defense of Marriage Act (DOMA) and individuals’ ability to recoup taxes paid in previous years. Employees and retirees are now able to reclaim income taxes for “open” taxable years—usually up to three years. With guidance in place, UC has now set a process for helping employees and retirees recoup back taxes.
If you were married as of December 31 of any calendar year, you are treated as married for the full calendar year. For example, if you legally married on March 1, 2013 (and are still married on Dec. 31, 2013), you will be treated as married for the entire year. This means that, if your new spouse (former domestic partner) was covered under your UC-sponsored health plan for all of 2013, UC’s portion of the premium for your spouse’s coverage will not be treated as “imputed income,” and any taxes related to this coverage that were withheld from your paycheck can be refunded.
It is important to report your marriage to your Campus or Health System Benefits Office as soon as possible so that UC can refund any 2013 taxes previously withheld. The deadline for employees to provide these forms to Campus or Health System Benefits if they want this change reflected in 2013 has already been communicated on various HR websites as November 1, 2013. If any employees have missed this deadline, they should still provide the UPAY 850 to their Campus or Health System Benefits Office, but Payroll Services cannot guarantee that forms received after November 1 will be processed as 2013 activity, and may instead be processed in 2014. If forms are processed in 2014, then Payroll Services will issue a W-2c for 2013 and will be able to recover and refund excess FICA taxes, but the employee may need to file an amended Federal tax return to recover excess income taxes paid in 2013 (employees should consult their tax advisor for guidance).
To report your marriage, fill out the UPAY 850 form and send it to your applicable Benefits Office. The form is available on the At Your Service website or by clicking the link in Related Information. The Campus or Health System Benefits Office will forward all forms received from employees to Payroll Services by November 15, 2013.
Retirees should report a marriage to the UC Retirement Administration Service Center by completing the UBEN 100 form, which is also available under Related Information.
If you want to get a refund of FICA taxes withheld in a prior year that is “open” under statute and there was a marriage in place, you will need to complete a consent form available under Related Information.
Please be aware that the statute of limitations for the 2010 tax year expires in April, 2014, so if you want the Payroll Department to request a refund of 2010 FICA taxes in time to meet the statute deadline for 2010, please provide the consent form by January 31, 2014. For tax years 2011 and 2012, you have one additional year for each applicable year before the statute expires.
The form gives your consent for UC to request the FICA tax refund on your behalf. UC will submit the request for affected employees and retirees, and will send your FICA refund to you once UC receives it. UC will also send you a W2-c, which you can use to file an amended tax return requesting a refund of federal income taxes.
If you want a W2-c for income tax refund purposes only, and do not want a FICA refund, please send the request via email to Mario Nored at firstname.lastname@example.org.
If you have any questions, employees should contact their Campus or Health System Benefits Office or Payroll Office contact Mario Nored at email@example.com.
Retirees should contact the UC Retirement Administration Service Center at (800) 888-8267.
Additional information about the effects of DOMA on compensation and benefits, including a chart with information on the effect of the DOMA ruling on all UC benefits for employees and retirees with a same-gender spouse is available at: http://atyourservice.ucop.edu/news/general/1309-doma.html.
The ruling and benefits changes do not apply to same-sex domestic partners.