Yale payroll errors costs same-sex couples thousands
A payroll error at Yale University will cost same-sex couples thousands in tax withholdings this upcoming year, the New York Times reports. The accounting error will force the couples to pay double their withholding rate, which will lead to drastic cuts in individual pay.
Discrepancies in the difference between federal and state tax laws led to the error. Under federal law, same-sex couples are not covered by joint health insurance. However, the university offers coverage to same-sex couples, leading to a mishap when Yale wrongly registered those employees as tax-exempt on federal forms, according to the Times.
Under Connecticut law, the same-sex couples are recognized as "married," but the standing does not carry over to federal documentation.
"Unfortunately, the payroll system inadvertently treated those benefits as nontaxable for Connecticut and federal purposes for the entire calendar year of 2010," said a letter from Yale’s payroll department to affected employees, the Times revealed.
The error could lead to pay cuts upward of 33 percent prior to this year's tax filings. The Times states that one employee will be subjected to an $8,000 reduction in pay. Yale officials expected the error to be rectified over a 90-day window.
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