Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I added my domestic partner to my company's health insurance…

Customer Question
I added my domestic partner...
I added my domestic partner to my company's health insurance plan and was not informed about imputed income. We cannot afford to lose net pay and now want to drop her.
Submitted: 3 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 18 minutes by:
6/1/2015
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 years ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,795
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
Verified
Welcome. Thank you for choosing us to assist you. My name is ***** ***** my goal is to help make your life, a little... less taxing.
The expert that you requested is not available at this time. Can you please elaborate on what it is that you need assistance with. I see that you wrote that you want to drop her from the insurance. Is it dropping her that you need assistance with or something else. Please clarify.
Ask Your Own Tax Question
Customer reply replied 3 years ago
I was hired by a company in February 2015- and had to enroll for my benefits by May 10, 2015 (when my 90 days passed from first hire). My company covers "domestic partner and dependents." We were on the phone with the Marketplace Rep for hours going over stuff- and never once heard about Imputed Income. Furthermore, there is nothing in the booklets that were given to us. It wasn't until May 21, 2015 I received an email from HR person (11 days after having to enroll for my benefits) that I needed to be aware that after verifying domestic partnership I would have imputed income on my paycheck and w2's and will be taxed,etc. From what I have read this can really hurt my net pay, etc. I want to know if we can drop my domestic partner (if we find out this is very costly- we are already having to pay 114.00 every two weeks for benefits much less to be taxed and add income that I do not receive)
from this due to what happened as this is not a "life qualifying event" and open enrollment doesn't begin again until November.
Customer reply replied 3 years ago
Oops.. the line about "life qualifying event" got mixed up- we just enrolled and would want to drop but now do not have a "life qualifying event..."
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 years ago
Yes, added a non dependent to your health insurance is considered a fringe benefit, which is taxable, as you already have found out. Based on the following list, you will not be able to remove your partner until the next open enrollment. SEE BELOW:
The Internal Revenue Service (IRS) provides guidelines on when employees can and cannot make changes to their pre-tax benefit programs. The categories listed below reflect the “Qualifying Life Events” that are required by the IRS for a change to be allowed and most are addressed separately in other guides.
You change your legal marital status, which includes marriage, death of spouse, divorce, legal separation, or annulment.
Your dependents change due to birth, adoption, placement for adoption, or death of the dependent.
You, your spouse, or your dependents terminate or commence employment.
You, your spouse, or your dependents reduce or increase their hours of employment.
Your dependents cease or commence to satisfy the requirements for coverage due to attainment of age or student status.
You, your spouse, or your dependents change place of residence or work.
You, your spouse, or your dependents are entitled to coverage under Part A or Part B of Medicare, or Medicaid.
You, your spouse or your dependents commence or return from an unpaid leave of absence such as Family and Medical Leave or military leave.
You receive a court order to provide coverage for your child (ren).
There is a substantial change (at least $50 per month) in the premiums and/or benefits in the plan covering dependents. Example: Spouse covers dependent child (ren) and the cost of spouse’s coverage increases at least $50 per month, dependents can be added to your plan.
You stop the withholding of premiums from your pay.
If none of the events listed apply to an employee’s situation, the employee will need to wait for the next annual enrollment period in order to enroll or make changes to their benefits. There are some exceptions as listed below, or you may contact the Employee Benefits Office to discuss your situation with an analyst.
----------------------
You may be able to argue the fact that you were not told that adding your partner would be considered a fringe benefit, however, I don't know if that will make a difference. Nothing beats a failure but a try.
REFERENCE SOURCE:
www.unchealthcare.org/site/humanresources/benefits/guides/change_oae
Let me know if I can be of further assistance to you regarding this matter.
Ask Your Own Tax Question
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 years ago
You may let the employer know that having your partner on the health insurance plan creates a financial hardship for you and that you were not aware of the imputed income situation prior to adding her to the plan. Check to see if your employer has a Hardship Exception policy in place. Usually this exception is for adding someone to a plan, but it also may work in reverse as well.
Ask Your Own Tax Question
Customer reply replied 3 years ago
My domestic partner is not part of the pre-tax IRS benefit which is why I was researching further. From what I read the open enrollment period for this is like it is specifically because of agreement IRS has made regarding pretax stuff....and again I'm only pretax...benefit she is not. This is why I thought when I was originally talking to a Tax Lawyer there may be something else to this since we weren't informed of any financial consequences such as imputed income, etc. I already knew about the "Qualifying Events"
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 years ago
Hello again,
No, I am not a Tax Attorney. I will opt out and release the question back into the question queue. Have a good night.
Ask Your Own Tax Question
Tax Professional: Lev, Tax Advisor replied 3 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,338
Experience: Taxes, Immigration, Labor Relations
Verified
Hi and welcome to our site!
If your employer provides health insurance to beneficiaries other than your tax dependents - such as a non-dependent domestic partner, the employer MUST report the FMV of those health benefits to you as "imputed income" on the Form W-2.
HOWEVER - if your domestic partner is your dependent - there is NO "imputed income."
See here
http://www.rjfagencies.com/Blog/TaxationofDomesticPartnerCoverage.aspx
To be a federal tax dependent of an employee, a domestic partner must meet the requirements of a “qualifying relative” under Code §105(b). The partner must:
•Have the same principal place of abode as the employee and be a member of the employee's household.
•Receive over half of his or her support from the employee.
•Not be anyone's qualifying child.
•Be a (1) citizen of the U.S., or (2) a resident of the U.S. or a country contiguous to the U.S.
As we see - there is NO income limit requirement.
Thus - if you provide certification to your employee that your partner is your tax dependent under section 105 - your employer is allowed not to report imputed income.
Please verify if that works for your situation.
Ask Your Own Tax Question
Customer reply replied 3 years ago
I was asleep last night when this came through. I am unsure of partner qualifying for dependent- as she has her own income and receives the Earned Income Credit each year and we don't want to lose this (she is on disability- and has LTD and Social security from teaching). I don't see how we can drop her out of open enrollment when we were not informed of any of this nor is it listed anywhere in literature. I read the IRS enrollment period is because of the PRE TAX benefit and we don't get pre-tax benefit in any of this- it's the opposite for her. My last pay I now had 533.00 show for gross pay for insurance.... I am unsure if this were for one month because my benefits started on May 9th or if this is for each pay period.... It would seem that this is one month as medical FMV was 471.36 on one pay for May alone. I had a decrease in net pay of over 231.00- so pay more taxes, plus the insurance premium each pay for her (45.00 bi weekly). She has insurance- Priority Health/Medicare combo. with maximum out of pocket of 5000.00.... Mine has a 3000.00 deductible for two of us on top of this. We were under the impression that maybe she would have dual insurance for Coordination of Benefits and God forbid something catastrophic happened with her health we would be covered. Now I am trying to figure out if all this is worth it.... as we always want to be covered.... but I don't know if we should be saving another way. I was out of a job for 5 months (laid off-company folded) so this job is very good- but we are playing catch up enough as it is.
Customer reply replied 3 years ago
Can we revoke Domestic Partnership form we signed- it was very generic- my partner even hand wrote next to one question that company asked about- as the way the company had this worded we didn't agree to it as in it stated we agreed that we are both responsible for all expenses and third party debt for one another and we are not- so we hand wrote this in. Also, the company's letterhead was not on form- it looked like something printed from Word Doc. So confused.
Tax Professional: Lev, Tax Advisor replied 3 years ago
.
I am unsure of partner qualifying for dependent- as she has her own income and receives the Earned Income Credit each year and we don't want to lose this (she is on disability- and has LTD and Social security from teaching).
A.
Regarding being a dependent - please be aware that being a dependent for medical purposes and being claimed as a dependent on the tax return - these are different - and requirements are different.
She may be your dependent for medical deduction purposes - and not being claimed as a dependent on your tax return.
So it is possible to certify that she is your tax dependent under section 105 - and that woudl NOT affect her Earned Income Credit or disability qualification.
.
I don't see how we can drop her out of open enrollment when we were not informed of any of this nor is it listed anywhere in literature.
A.
Unfortunately - the ONLY way to change insurance is to terminate your employment.
You would not be able to change enrollment without having a Qualifying Life Event - and based on your information - there is no such event.
That imputed income requirement is based on current tax law - and just because you were not aware - doesn't change anything.
.
As the best option - I suggest to verify if your partner qualifies as your dependent under section 105 - and communicate with your employer not to treat the insurance cost as your imputed income.
If that doesn't work out - your only way to terminate that employment - and that will terminate insurance contract.
Or to wait for another enrollment period - most likely - it will be in November and change enrollment.
Unfortunately - there is no other way around the issue.
Sorry if you expected differently.
Ask Your Own Tax Question
Customer reply replied 3 years ago
I further researched- we have until June 9, 2015 to change any of my benefits plan and drop my partner from medical (30 days from enrollment).
Tax Professional: Lev, Tax Advisor replied 3 years ago
Appreciate your update.
That might be a solution - if you are still within 30 days initial enrollment period.
Within the enrollment period all changes are allowed.
Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,338
33,338 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I enrolled my Domestic partner in my insurance at work. I
I enrolled my Domestic partner in my insurance at work. I saw the rate and it was completely doable. I got my first paycheck with those deductions and noticed that on top of the insurance premium the charged me domestic partner imputed income for I'm assuming the insurance. should my employer have informed me of the imputed income prior to me enrolling, had I known I would have probably not enrolled … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,674 satisfied customers
I have health insurance coverage through my employer. I
I have health insurance coverage through my employer. I added my partner to my plan as my domestic partner, as we are not married. Now every pay, every two weeks, there is a section listed under my pr… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,338 satisfied customers
My employer will not take imputed income tax domestic
my employer will not take imputed income tax for my domestic partner (listed as such through the company i work for) off of my paycheck. we live in texas, and this will be adding about ~8300 a year to… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
My employer wont issue a W2-C to me. My domestic partner
My employer won't issue a W2-C to me. My domestic partner is also a dependent (does not work) so I have ~7K in imputed income for health insurance coverage on my W2 for 2013. I did not receive a lette… read more
Megan C
Megan C
Certified Public Accountant (CPA)
Master's Degree
8,655 satisfied customers
My last paycheck was almost entirely taxed due to Imputed Income
My last paycheck was almost entirely taxed due to Imputed Income for domestic Partner benefits. When I engaged my companies Payroll and Benefits departments they both directed me IRS saying they have … read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,338 satisfied customers
Hi, I have a tax question. My girlfriend and I live in San
Hi, I have a tax question. My girlfriend and I live in San Francisco. We started off as roommates and I still pay her a rent for the place we live in, that she owns. Now she is quitting her job and sh… read more
socrateaser
socrateaser
1,031 satisfied customers
Hi, I cover my domestic partners medical insurance through
Hi, I cover my domestic partner's medical insurance through my company. The company imputes my income for this coverage. My partner is actually my dependent for tax purposes. Is there a way I should b… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,338 satisfied customers
Half way through the year I added my domestic partner to my
Half way through the year I added my domestic partner to my insurance. How do I determine if I can deduct any type of my "imputed income" that I have paid for my domestic partner through my companies … read more
Wendy Reed
Wendy Reed
Master Tax Advisor Enrolled Agent
Master's Degree
60 satisfied customers
Hi - I live in Connecticut with my girlfriend. We have lived
Hi - I live in Connecticut with my girlfriend. We have lived together in the same house for the last 4 years. She is mainly dependent on me for her livelihood. She has recently lost her insurance and … read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
I have a domestic partner that I get taxed(by the IRS) for
I have a domestic partner that I get taxed(by the IRS) for on my provided employee benefits. The additional federal taxes are added to my reported income as "misc income". I now am in a higher tax bra… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
Tax Question If you were a hetrosexual domestic partner
Tax Question: If you were a hetrosexual domestic partner in Maryland with health benefits and your partner was a tax dependent by the IRS 520, they passed all the criteria at the time, you do not pay … read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
I do not claim my domestic partner as a dependent on my taxes,
I do not claim my domestic partner as a dependent on my taxes, but I pay over half the bills for the apartment we live in as well as for food. I recently added him to my health insurance as a domestic… read more
Bizhelp
Bizhelp
Certified Public Accountant (CPA)
Bachelor's Degree
638 satisfied customers
What is a domestic tax I currently added my fiance as a domestic
What is a domestic tax? I currently added my fiance as a domestic partner for health benefits from my company and they are now withdrawing a domestic tax from my pay check!!! Quite a hefty tax I might… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
I am a NJ resident. I am considering adding my domestic parnter
I am a NJ resident. I am considering adding my domestic parnter onto my health plan. I am aware that my employer will imput my income with the amount of the benefit attributable to my domestic partner… read more
Wendy Reed
Wendy Reed
Master Tax Advisor Enrolled Agent
Master's Degree
60 satisfied customers
My girlfriend of 8 years and mother of our 2 children, in order
My girlfriend of 8 years and mother of our 2 children, in order to qualify for health insurance benefits through my employer, she is listed as my domestic partner. She also qualifies as my dependent f… read more
Wendy Reed
Wendy Reed
Master Tax Advisor Enrolled Agent
Master's Degree
60 satisfied customers
Do i get a refund if I pay a penalty tax for domestic ...
Do i get a TAX refund if I pay a penalty tax for domestic partner health insurance? My paychecks add an additional $230 to each paycheck so I am taxed as-if I made the additional $230 that I never rec… read more
Brad
Brad
Bachelor's Degree
122 satisfied customers
I can legally, according IRS code 152, claim my ...
I can legally, according IRS code 152, claim my opposite-sex domestic partner as a dependent. This makes me, I think, eligible for not paying taxes on the medical and dental benefits my employer alrea… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
I have a domestic partner covered on my insurance ...
I have a domestic partner covered on my insurance throught my employer. I have his as a domestic partner just because we are not married yet but it is not a same sex relationship. I am being charged t… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x