What types of fringe benefits may be treated differently for Vermont tax purposes than for federal tax purposes?
Federal law allows an employer to provide, as a non-taxable benefit, health insurance for a spouse. However, the amount of your employer’s contribution for coverage for your civil union partner and non-IRS eligible dependents is considered income and your employer will be required to include that income in the federal wages reported on your W-2. Also, any premiums you pay for coverage for your partner and non-IRS eligible dependents will not qualify for a federal tax exemption. For computing Vermont tax, the amount of your employer’s contribution is non-taxable in any circumstance where it would be non-taxable if it were provided to a married person. The Vermont tax is computed by applying federal rules as though you and your partner filed as married on your federal return. In most cases, this will mean that the employer’s contribution is a non-taxed fringe benefit. Also, certain benefit plans allow an insurance premium paid by an employee to be excluded from taxable income (sometimes
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