Social Security and Medicare Tax Refunds for Same-Sex Marriage Couples
In September, the IRS issued guidance (Notice 2013-61) that provides simplified procedures for employers to claim refunds or adjust overpayments of FICA taxes applicable to certain benefits and remunerations provided to same-sex spouses (see IRS – Optional Simplified Methodologies for FICA Claims or Refunds in our October Benefit Beat article, More Agency Guidance Issued on Same-Sex Marriage). Contemporaneous with the Notice, the IRS posted several FAQs for Same-Sex Married Couples. Of relevance to employers, the IRS recently added two new FAQs (see FAQs 21 and 22) addressing the refund of Social Security and Medicare taxes.
An employee in a same-sex marriage is directed first to ask his/her employer for a refund of over-held Social Security and Medicare taxes. If the employer indicates that it will not be seeking the refund, the employee can file a Form 843, Claim for Refund and Request for Abatement, marked “Windsor Claim”.
If an employer is seeking a refund, two methodologies are provided, as more fully described in our Benefit Beat article. If the employer follows the second methodology, wherein the employee files a Form 941-X for the full year, the employer must obtain written confirmation from the affected individual that he/she will not be seeking a refund on his/her own merit; this, of course, is to ensure, no double dipping.
Matters relating to same-sex marriage continue to evolve and employers are well-advised to work closely with their tax advisors to ensure compliance.