msnbc.com news services
updated 7/1/2010 6:08:31 PM ET 2010-07-01T22:08:31

Google is set to begin covering a cost that gay and lesbian employees must pay when their partners receive domestic partner health benefits, according to a report in the New York Times.

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The increased pay is largely to compensate these workers for an extra tax that heterosexual married couples do not pay. The increase will be retroactive to the beginning of the year, the newspaper said.

Google is not the first large company to make up for the extra tax, the Times reported, adding that Google’s move could inspire its Silicon Valley competitors to follow suit, as they compete for the same talent.

Right now Google offers benefits to the spouses or partners of both straight and gay employees.

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

Citing a study, the Times said employees with domestic partners will pay about $1,069 more a year in taxes than a married employee with the same coverage. Google will essentially cover those costs, the newspaper said, putting same-sex couples on an even footing with heterosexual employees whose spouses and families receive health benefits.

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