Protective Refund Claims for FICA Under DOMA Case
The Supreme Court heard the Windsor v U.S. case recently, challenging the constitutionality of the Defense of Marriage Act (DOMA). If the Court rules that DOMA is unconstitutional, FICA taxes paid on employee benefits for same sex spouses, both the employer and employee share, will be refundable. The catch is that the refund claim has to be filed within three years of the return filing date. For 2009 taxes, employers who wish to protect their right to file claims at a later date for any FICA taxes associated with eligible benefit payments made in the 2009 tax year should file protective refund claims by April 15, 2013. The protective claim is filed on Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return, for each entity that made an eligible payment and each quarter in which the eligible payment was made. The protective claim is filed to preserve the employer’s and affected employees’ claim to a refund in case the Windsor decision is resolved in the taxpayer’s favor. A protective claim is straightforward to file, and does not have to state a particular dollar amount or demand an immediate refund. Further, an employer that files a protective claim by April 15, 2013 can later decide whether to file a full refund claim should the Windsor case be decided in the taxpayer’s favor.