ERISA and Global Benefits

California Adopts Same-Sex and Domestic Partner Gross-up Tax Provision

October 17, 2013

The Global Compensation, Benefits & ERISA Practice Group

Governor Brown recently signed AB 362 into law.  AB 362 adds Section 17141 to California’s revenue and Taxation Code.  Until the law sunsets in 2019, California now excludes amount received by an employee from an employer to compensate “for the additional federal income tax liability incurred by the employee because, for federal income tax purposes, the same-sex spouse or domestic partner of the employee is not considered the spouse of the employee under Section 105(a) or Section 106(a) of the Internal Revenue Code, including any compensation for the additional federal income tax liability incurred with respect to those amounts.”
The law appears to apply to domestic partners, regardless of whether they are registered domestic partners.