Are there any income tax implications associated with domestic partnership coverage?
Yes. According to the Internal Revenue Service’s rules, if a domestic partner is not a “dependent” (as defined in Section 152 of the Internal Revenue Code), the “fair market value” of the partner’s coverage, less any contribution by the enrollee, is treated as income for federal tax purposes. Your department’s Human Resource Officer should be able to provide you with an approximation of the fair market value for The Empire Plan. This value, referred to as “imputed income,” will be added to your annual salary for income tax purposes and will apply even if you cover other dependents in addition to your partner. If your partner does qualify as a dependent under the Internal Revenue Code, there will be no imputed income. You must, however, submit a completed “Dependent Tax Affidavit” with your other enrollment documents.
