What is imputed income for same-sex domestic partner coverage?
Currently, the Internal Revenue Service (IRS) says that if an employee receives employer-paid benefits for anyone who is not the employee’s tax dependent, the value of the coverage is “imputed income” and is taxable. The additional coverage for your same-sex domestic partner and/or your partner’s children becomes a taxable benefit, unlike medical coverage for other enrolled family members. Imputed income is separate from, and in addition to, your payroll deduction. The amount of your imputed income depends on the plan(s) you choose and the level of your coverage. Imputed income is taxable. It increases your taxable gross income as well as your FICA (Social Security and Medicare) taxes withheld from your paycheck. Imputed income is reported on your annual Form W-2 which you file with the IRS each year.
