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This week Cambridge, MA became the first city to offer stipends to same-sex married public employees who face additional tax liabilities for benefits received under employment.  The unprecedented legislation will effectively subsidize the additional tax liability assumed by same-sex married couples that receive health benefits from their employers.
Under federal tax law, employer-provided health benefits for domestic spouses are taxable income.  Heterosexual couples can avoid this tax liability by marrying.  While many states have enacted legislation that recognizes same-sex marriages, federal law does not recognize these unions.  As a result, federal tax liability for same-sex married couples does not reflect the state-sanctioned unions.  Employees with domestic partners pay on average $1,069 more in taxes every year than employees with the same coverage but who are married[1].
The Cambridge stipends, paid quarterly to 22 same-sex married public employees, will defray the cost of this additional tax liability.  While no city or other municipality has enacted legislation providing these protections, the idea is not unprecedented.
In June of 2010 Google became one of a handful of corporations to offer similar packages to its employers.  Other companies that pay married same-sex couples based on their additional tax liabilities include Cisco, Kimpton Hotels and the Gates Foundation.
Cambridge should be applauded for its equality efforts.  And, while the Cambridge stipend program is sure to be the first of many, especially in the Northeast where states are generally progressive in their stance toward the validity of same-sex marriages, many remain hopeful that cities and municipalities will not have to resort to such measures.  A Senate repeal hearing for the Defense of Marriage Act (DOMA), the current Federal Act that prohibits the recognition of same-sex unions, has been set for July 20th.   If repealed, married same-sex couples will face the same tax treatment as their married heterosexual counterparts.

[1] Tara Siegel Bernard, Google to Add Pay to Cover a Tax for Same-Sex Benefits, New York Times June 30, 2010.