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Tax refunds for same-sex couples

Healthcare contributions at issue

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refund, gay news, Washington Blade
refund, gay news, Washington Blade

If an employer included the value of a spouse’s healthcare coverage as an item of income on the employee’s Form W-2, the employee should ask the employer for an amended Form W-2 excluding that amount of income.

By NANCY ORTMEYER KUHN

The Internal Revenue Service recently clarified the steps needed for same-sex spouses to claim a refund of taxes paid, if one spouse included the other spouse in a healthcare plan, and the employer’s contribution for that coverage was reported by the employer as income. The couple must be lawfully married under state or D.C. law in order to claim the refund.

In a letter from the IRS to Vermont Rep. Peter Welch, the IRS indicated that if an employer included the value of a spouse’s healthcare coverage as an item of income on the employee’s Form W-2, the employee should ask the employer for an amended Form W-2 excluding that amount of income. Spousal healthcare coverage by an employer is not taxable to the employee.  Using the amended Form W-2, an amended Form 1040 should be filed claiming a refund for the excess taxes paid.

If the employer refuses to issue an amended Form W-2, the employee can complete Form 4852 and check the box indicating the employee received an incorrect Form W-2. The employee should then subtract the value of the healthcare coverage from gross income and report the adjusted amount on Line 7 of Form 4852.  The employee can then determine the correct tax on the modified amount of taxable income, and file an amended Form 1040 requesting a refund.

If the increased wages were also subject to Social Security tax, i.e., if the increased wages were below $113,700, then a refund for excess Social Security taxes can also be claimed by filing Form 843, including all attachments listed in the instructions for Form 843.

A tax refund may be claimed if a tax form claiming the refund is filed within three years after the date the original tax return is filed or within two years after the date the tax was paid, whichever is later. Generally, April 15 of the following year is considered the payment date, regardless of when the tax return was filed. Therefore, refunds could be claimed for the 2012 through 2014 tax years if employers included the value of spousal health insurance in the employee’s income during any of those years. Copies of the relevant forms may be found at www.irs.gov.

Additionally, as highlighted in a recent case filed in District Court in Massachusetts, tax savings may be found by filing amended tax returns for prior years with the “Married Filing Joint” filing status if a “single” or “head of household” filing status had previously been used.  The lawsuit challenges the constitutionality of the Defense of Marriage Act (DOMA) and alleges unequal treatment as compared to similarly situated opposite sex married persons. See Horowitz & Vigorito v. United States, Civil Action No. 1:14-cv-12839 (D.C. Mass. 7/2/2014). IRS Revenue Ruling 2013-17 states that for federal tax purposes, the IRS will recognize a marriage of same-sex individuals. To be valid, the marriage must have been entered  into in a domestic or foreign jurisdiction whose laws authorized same-sex marriages, even if the couple resides in a jurisdiction that does not recognize same-sex marriage. Thus, the tax refund claimed in this lawsuit should be forthcoming without the need for extended litigation.

The contents of this article are intended for general informational purposes only and should not be considered legal advice. This is part of a series of monthly articles by Jackson & Campbell on legal issues of interest to the LBGT community. Jackson & Campbell is a full-service law firm based in Washington with offices in Maryland and Virginia. If you have any questions regarding this article, contact Nancy O. Kuhn at 202-457-1621 or [email protected]. If you have any questions regarding our firm, please contact Don Uttrich, who chairs our Diversity Committee, at 202-457-4266 or [email protected].

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3 Comments

3 Comments

  1. TheRev Timmy

    August 5, 2014 at 4:53 pm

    We live in Pennsylvania, where we are now mostly-permanently married – Federal State and Local, by virtue of our 2003 marriage in Canada, the first country on Earth that would marry honest Americans born non-heterosexual.

    This year we filed as married, and got a refund check payable to us as a couple, from U.S. Dept. of Treasury, even though PA didn’t yet recognize our marriage. We filed as married in PA anyway, since for us to say we’re legal strangers in PA would have required us to commit FEDERAL civil disobedience to our federal government that says we’re married. Since we are American citizens first and foremost, we felt we had no choice but to be honest.

    I’m grateful that the evil myth of Heterosexual-Supremacy that dominated Pennsylvania law is now mostly toast in marriage laws of PA, and will be finally toast when SCOTUS rejects (again) the re-appeal by the clerk in PA who doesn’t want to comply with the federal courts.

    Welcome to Heterosexism Anonymous: http://youtu.be/kXZoPKVlFLA

  2. TheRev Timmy

    August 5, 2014 at 4:54 pm

    We live in Pennsylvania, where we are now mostly-permanently married – Federal State and Local, by virtue of our 2003 marriage in Canada, the first country on Earth that would marry honest Americans born non-heterosexual.

    This year we filed as married, and got a refund check payable to us as a couple, from U.S. Dept. of Treasury, even though PA didn’t yet recognize our marriage. We filed as married in PA anyway, since for us to say we’re legal strangers in PA would have required us to commit FEDERAL civil disobedience to our federal government that says we’re married. Since we are American citizens first and foremost, we felt we had no choice but to be honest.

    I’m grateful that the evil myth of Heterosexual-Supremacy that dominated Pennsylvania law is now mostly toast in marriage laws of PA, and will be finally toast when SCOTUS rejects (again) the re-appeal by the clerk in PA who doesn’t want to comply with the federal courts.

  3. TheRev Timmy

    August 5, 2014 at 4:54 pm

    We live in Pennsylvania, where we are now mostly-permanently married – Federal State and Local, by virtue of our 2003 marriage in Canada, the first country on Earth that would marry honest Americans born non-heterosexual.

    This year we filed as married, and got a refund check payable to us as a couple, from U.S. Dept. of Treasury, even though PA didn’t yet recognize our marriage. We filed as married in PA anyway, since for us to say we’re legal strangers in PA would have required us to commit FEDERAL civil disobedience to our federal government that says we’re married. Since we are American citizens first and foremost, we felt we had no choice but to be honest.

    I’m grateful that the evil myth of Heterosexual-Supremacy that dominated Pennsylvania law is now mostly toast in marriage laws of PA, and will be finally toast when SCOTUS rejects (again) the re-appeal by the clerk in PA who doesn’t want to comply with the federal courts.

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Business

Study: One in ten LGBT workers experienced discrimination at work

LGBTQ employees of color were more likely to report being denied jobs and verbal harassment at work as opposed their white counterparts

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bullying in the workforce, gay news, Washington Blade

LOS ANGELES – A new study by the Williams Institute at UCLA School of Law finds an estimated 46% of LGBT workers have experienced unfair treatment at work at some point in their lives, including being fired, not hired, or harassed because of their sexual orientation or gender identity.  

An estimated 9% of LGBT employees reported experiences of discrimination in the past year, despite the U.S. Supreme Court’s 2020 decision in Bostock v. Clayton County, which extended employment non-discrimination protections to LGBT people nationwide. Approximately 11% of LGBT employees of color reported being fired or not hired because of their sexual orientation or gender identity in the last year.

Using survey data collected in May 2021 from 935 LGBT adults in the workforce, researchers examined lifetime, five-year, and past-year discrimination among LGBT employees.

Results show that over half (57%) of LGBT employees who experienced discrimination or harassment at work reported that the unfair treatment was motivated by religious beliefs, including 64% of LGBT employees of color and 49% of white LGBT employees.

“Employment discrimination and harassment against LGBT people remain persistent and pervasive in 2021,” said lead author Brad Sears, Founding Executive Director at the Williams Institute. “Passing the Equality Act would ensure that LGBT people—particularly transgender people and LGBT people of color—are allowed to participate fully in the workplace as well as other public settings.”

ADDITIONAL FINDINGS:

Discrimination

  • 30% of LGBT employees reported experiencing at least one form of employment discrimination (being fired or not hired) because of their sexual orientation or gender identity at some point in their lives.
  • 29% of LGBT employees of color reported not being hired compared to 18% of white LGBT employees.

Harassment

  • 38% of LGBT employees reported experiencing at least one form of harassment (including verbal, physical, or sexual harassment) at work because of their sexual orientation or gender identity at some point in their lives.
  • LGBT employees of color were significantly more likely to experience verbal harassment than white employees.
    • 36% of LGBT employees of color reported experiencing verbal harassment compared to 26% of white LGBT employees.

Religious Motivation

  • Of employees who experienced discrimination or harassment at some point in their lives, 64% of LGBT employees of color said that religion was a motivating factor compared to 49% of white LGBT employees.

Avoiding Discrimination

  • Half (50%) of LGBT employees said that they are not open about being LGBT to their current supervisor and one-quarter (26%) are not out to any of their co-workers. 
  • Many LGBT employees reported engaging in “covering” behaviors to avoid harassment or discrimination at work, such as changing their physical appearance and avoiding talking about their families or social lives at work.
    • For example, 36% of transgender employees said that they changed their physical appearance and 28% said they changed their bathroom use at work to avoid discrimination and harassment.

Read the report

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Business

Time to dust off your pre-pandemic budget

We can no longer rely on closures to restrict us from spending money

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With pandemic restrictions lifting, we’ll all be spending more on going out in 2021 than we did last year.

D.C.’s first ‘mostly open’ weekend shows there is a year’s worth of socializing built up. It was amazing to feel the energy of the District roar back to life. From long lines outside bars to literal dancing in the streets – this is the city we all came to love. Now that the physical hangover may have subsided, you should prepare for the financial hangover. If you were lucky to keep your full pay and position through the pandemic, data tells us most of you were paying down debt.

The first thing everyone needs to do is dust off that old pre-pandemic budget. Sadly (or really luckily), we can no longer rely on health restrictions to naturally restrict us from spending. If you need a refresher, start with your post-tax income. From there, subtract ‘fixed’ or required expenses, like rent, and the balance is what you get to play with. Some may ask why I don’t use gross income (aka the before tax income) like many financial institutions do for credit applications. Frankly, it’s because net income (aka the money you actually receive) is the most practical number to budget daily life with. It’s what you can tangibly use to live.

Now as you develop your budget, return to using an app like Mint to take some of the work out of it. If you prefer to retain some level of privacy, many banks offer their own version of ‘spending trends’ that you can use to put together a more simple budget. This time the challenge is a bit different – we are all ‘restarting’ our social lives. So instead of having to ‘cut’ things, we can better prioritize what we actually want to do. Still – it is not easy or fun to have to choose, but every dollar you don’t spend today, will be there for the next rainy day.

Finally, so many of our friends and family lost their jobs or had their wages cut during the pandemic. Expanded unemployment benefits helped, but anyone trying to budget for life in D.C. knows that choices had to be made and often rent/utilities took a back seat to eating. Luckily, a state-run, but federal program will help people pay back rent and utilities, so they can focus on getting back to work. In D.C., this is called StayDC, but each jurisdiction offers a similar program.

Be prepared to do a little homework, you will need proof of income (or lack thereof) and documentation of the late payments. Finally, your landlord will need to complete separate forms, but it is in their best interest to receive those funds, so don’t let them drag their feet. The program will cover back rent to April 2021, three months of future rent, and past utilities. Do not delay, nor feel any shame by participating – this is the key to your long term success and, frankly, is a drop in the bucket compared to other spending priorities.

I hope this helps and I wish everyone a much more fun and prosperous 2021.

Information contained herein is for informational purposes only and should not be considered investment advice or recommendations. Advice may only be provided after entering into an advisory agreement with an advisor.

Alex Graham is a Principal at Graham Capital Wealth Management, a registered Investment Advisor located on K Street.

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Gay D.C. business owner to run 100-mile ultramarathon

Brandt Ricca to raise money for Capital Pride, LGBTQ businesses

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Brandt Ricca (Photo by Jonathan Thorpe/jthorpephoto)

Brandt Ricca will begin a non-stop 100-mile ultramarathon at 6 a.m. on Oct. 7 while most D.C. residents will still be sipping their morning coffee.

In a year of isolation and economic downturn, Ricca decided to run 100 miles in two days to benefit local, LGBTQ-owned businesses affected by the coronavirus pandemic. Ricca, who’s lived in D.C. for 10 years, is donating the money he raises to the Capital Pride Alliance and Equality Chamber of Commerce, where he has been a member since 2018.

The gay entrepreneur and owner of the D.C.-based business Nora Lee by Brandt Ricca understands first-hand how the ongoing pandemic affects small businesses, particularly LGBTQ-owned companies.

“I definitely want to give back to the community and local colleagues, especially because Capitol Pride has been now canceled two years in a row,” Ricca said.

Out of the funds raised, 90 percent will go towards funding 20 small business grants through the Equality Chamber of Commerce and the remaining 10 percent will go towards supporting Capital Pride Alliance.  

Brandt, already an avid runner and self-described “fitness explorer,” decided after crowdsourcing ideas to pursue the 100-mile project. Ricca has been a frequent visitor at the Equinox Anthem Row in D.C. to prepare for the run.

“I was looking to do my next fitness endeavor, at the same time wanting to do something to get back to the fellow business owners in D.C.,” he said.

Applications for the 20 grants of various sizes for LGBTQ businesses are projected to open this summer through the Equality Chamber of Commerce, Ricca said. His goal is to raise $100,000 from individuals and companies. The grants will be distributed in October following the completion of the run.

Equality Chamber of Commerce Vice President Riah Gonzales-King is in the process of developing grants and additional summer educational programming to help young LGBTQ entrepreneurs and students start their businesses.

“So much of the culture centers around these businesses, many of which have been around for decades,” Gonzales-King said. “They’re pillars of the community — their owners are pillars in the community. And I think it’s time that we gave back.”

Helping LGBTQ entrepreneurs specifically at this time is essential, Ricca said, especially entrepreneurs in the creative and hospitality industry.

Ricca began training in February with the help of several exercise experts like Brian Mazza, a New York City fitness entrepreneur who ran 50 miles last December to raise awareness for male infertility stigma. The former Men’s Health headliner is guiding Ricca’s physical training, which has been a near-daily routine. Ricca was inspired by Mazza’s run in the first place.

Ricca reached out to Mazza over Instagram to get his assistance and training.

Mazza said Ricca reaching out over Instagram “meant the world.”

“I believe what he’s doing for his cause is remarkable,” Mazza said. “It’s important. I’m happy that he’s standing up for what he believes in and helping these businesses and helping individuals in general.”

Jacob Zemer, a coach and nutritionist, has designed a daily nutrition program for Ricca to prepare him for the run. Zemer and Mazza have been working together throughout the process to track Ricca’s health and progress.

The two fitness experts work with Ricca multiple times a day to monitor his diet, mileage, heart rate and pace monitoring. Both Mazza and Zemer said Ricca’a training has been successful.

“Brandt’s an excellent individual,” Zemer said. “He’s very easy to work with. He’s highly coachable, he’s a pleasure to talk to every day.”

Pacers Running will be sponsoring and designing Ricca’s 100-mile route throughout the D.C. region. The company is also working with Ricca to design specific shoes for the ultramarathon.

Pacers Running CEO Kathy Dalby won “Best Straight Ally” in the Washington Blade’s 2019 Best of Gay D.C.

“I really wanted someone local who could really guide me on a route,” Ricca said.

Elyse Braner, a community lead at Pacers Running and longtime friend to Ricca, said the local business was excited to collaborate with Brandt because of an alignment of values.

“As a community, inclusivity and diversity is extremely important to Pacers Running,” Braner said. “As a small business, we really appreciated that Brandt wanted to do an event that supported small businesses — specifically LGBTQ businesses.”

Originally an event-planning business, Nora Lee debuted in 2018 on the second annual Allison Gala, a fundraising event benefiting the Triple Negative Breast Cancer Foundation, which Brandt created in memory of a family friend. He’s worked with a range of clients, including the Dupont Circle Hotel and Sotheby’s Real Estate.

Looking back at events on his website, he said he found himself bored with the photography. This led him to focus on creative marketing and decided to pivot his business model at the beginning of the pandemic. Now, Ricca provides photography and video shoots for clients.

“When COVID hit I decided to, like every business owner, I revisited my plan,” he said. “I really enjoyed the creative branding more in the photo shoot. So I decided to pivot strictly to just a full-on creative branding agency.”

The training for the 100-mile run has provided a stable routine for Ricca, which has helped him get through the pandemic, he said. Ricca is planning to create a campaign this summer inviting LGBTQ entrepreneurs to do their version of 100 miles, with the hope it will provide positive stability in their lives as it does in his.

“Obviously, people think I’m crazy for doing this,” Ricca said. “All the uncertainty out there right now – with business, with clients, with whatever; I needed an anchor. Something that was going to be a routine for me that I can control.”

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