Google to Cover Gay Tax Inequality

The list of benefits that make Google one of the world's most attractive employers just grew again, this time for gay and lesbian employees. The company announced Thursday that it would begin to cover the extra costs gay and lesbian employees must pay compared to straight employees when their partners receive domestic partner health benefits.

The increased compensation will be retroactive to the beginning of the year, according to The New York Times, which outlined the problem and the significance of Google's action.

"Google is not the first company to make up for the extra tax," reported the Times. "At least a few large employers already do. But benefits experts say Google's move could inspire its Silicon Valley competitors to follow suit, because they compete for the same talent.

"Under federal law, employer-provided health benefits for domestic partners are counted as taxable income, if the partner is not considered a dependent. The tax owed is based on the value of the partner's coverage paid by the employer."

It was not immediately clear how many of the company's almost 21,000 employees would be affected by the new policy, which only applies to same-sex couples because straight couples have the option of marrying, according to the Times.

According to a 2007 estimate from the Williams Institute, employees with domestic partners may pay almost $1,100 more in taxes each year compared to married employees with the same health coverage.