Skadden Adopts Tax Gross-up
Retroactive to January 1, 2011, Skadden has expanded its benefits program to provide a tax gross-up payment for partners and employees who are taxed on the value of health benefits provided by the firm to their same-sex spouses or same-sex domestic partners. In providing this payment, Skadden is taking the lead, along with a small number of other law firms and major corporations, in addressing a key aspect of legislated workplace inequality for LGBT personnel.
Under current federal and state income tax law and the federal Defense of Marriage Act (DOMA), as well as, in many states, state versions of DOMA, the value of health insurance benefits for same-sex couples (regardless of marital status under state law) is treated as additional imputed taxable income for the partner or employee. Skadden is providing this gross-up in an effort to offset that additional tax cost. Married Skadden partners and employees who opt to cover their opposite-sex spouses under the firm's health plans are not subject to a similar tax cost. Our new gross-up policy seeks to ameliorate the discriminatory impact of these federal and state laws for LGBT partners and employees.