Penn to provide tax offsets for employees in same-sex partnerships

Penn has become one of the first universities to compensate employees in same-sex domestic partnerships who must pay taxes on healthcare benefits.

The University announced in the May 22 edition of The Almanac that it will provide up to $125 a month or $1,500 per year to employees who pay taxes to the Internal Revenue Service for health benefits their partners receive. The policy will take effect July 1, 2012.

Federal and Pennsylvania state tax codes currently do not recognize domestic partners as dependents for tax purposes, according to Terri Ryan, manager of strategic communications for the Division of Human Resources.

“By providing some extra compensation to the employees in that category, employers are acknowledging the inequity and doing something to try to make domestic partner benefits truly more equitable,“ LGBT Center Director Bob Schoenberg said.

For Schoenberg, the new policy of “grossing up” to compensate for the tax “demonstrates that Penn is among the most progressive and inclusive employers.”

Penn began to offer domestic partner benefits in 1994, becoming one of the first employers in the Philadelphia area to do so.

Tax offsets are already offered by several universities, including Syracuse, Yale and Columbia universities and Bowdoin and Barnard colleges. Additionally, companies such as Facebook and Apple implemented the practice of “grossing up” in 2011, while Microsoft and Yahoo started this year, according to The New York Times.

According to Ryan, employees not currently covering their domestic partners under Penn’s medical coverage may add them until June 30, 2012.

Beginning July 1, 2012, employees may add domestic partners in the event of a “qualifying life event” or during the annual open enrollment period. Approximately 125 Penn employees currently cover their domestic partners, Ryan wrote in an email.

Rising College junior and Lambda Alliance Chair Hugh Hamilton said that the tax offset policy was “jumpstarted” by Penn’s Action Plan for Faculty Diversity and Excellence.

Released by the University last June, the Diversity Action Plan is aimed at recruiting a more diverse faculty and staff. Last February, the Action Plan drew some criticism from some LGBT community members who felt that it did not sufficiently emphasize LGBT faculty representation.

The new tax offset policy “is a great step both in terms of basic fairness to our LGBT faculty and staff, but also in terms of competitiveness with peer institutions,” Hamilton said. “It sends the message to prospective faculty and staff that Penn is a place where they’ll be valued.”

Chemistry professor Eric Schelter agreed, adding that “the initiative sends a clear, supportive message to the faculty that will help to attract and retain scholars with same-sex partners in every discipline.”

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