Beginning July 1, the University of Pennsylvania will provide a tax offset program for same-sex couples who work for the university. The program offers as much as $125 per month for employees who are covering same-sex domestic partners under their current Penn medical plans, with a maximum of $1,500 per year. This offset will appear in employees’ paychecks as additional taxable income — minus applicable state and federal taxes — starting in late July.
Many faculty and staff at the university already enjoy these pre-tax health-insurance premiums for themselves and their dependents. But up until now, employees covering same-sex domestic partners under Penn’s benefit plans have had to pay federal and state taxes on the value of their partner’s coverage. This is largely because federal and Pennsylvania tax codes do not recognize domestic partners as dependents.
“At Penn, this tax inequality is being addressed,” says Jack Heuer, vice president of the Division of Human Resources. ”Penn has a long history of supporting our LGBT community. We were the first Ivy League institution and among the first local employers to include same-sex domestic partners in our benefits coverage, and now we’re among the first universities to provide this tax offset.”