What is domestic partner imputed income?
The imputed income is the cost of coverage for the employee’s domestic partner and/or partner’s children. That portion is considered imputed income by the IRS. Imputed income is in addition to your monthly plan cost.
Where is domestic partner imputed income reported on W-2?
Therefore the value of this benefit would be included as taxable income and reported on the W-2 in Box 1 (W-2 Federal), Box 3/5 (Social Security/Medicare Gross), and Box 16 (State). The taxable amount is the fair market value of the domestic partner’s coverage over the amount paid for the employee’s own coverage.
Is domestic partner income taxable?
Federal law treats benefits for spouses, children and certain dependents the same way. However, a domestic partner is not considered a spouse under federal law. If your partner is an IRS-qualifying dependent on your federal tax return, these benefits would not be taxed.
Does IRS recognize domestic partners?
The IRS doesn’t recognize domestic partners or civil unions as a marriage. This means that on your federal return, you should file as single, head of household, or qualifying widow(er).
How is domestic partner imputed income calculated?
One simple way to do the calculation is to determine the difference between your company’s cost of an employee-only monthly premium and the cost of an employee-plus-one monthly premium. Multiply that number by 12 and you will get your total.
Do I pay taxes on imputed income?
Imputed income is subject to Social Security and Medicare tax but typically not federal income tax. An employee can elect to withhold federal income tax from the imputed pay, or they can simply pay the amount due when filing their return.
Can I deduct health insurance premiums for my domestic partner?
Following recent updates to the federal tax code, individuals cannot claim their domestic partner’s health insurance premiums as a deductible expense. That being said, they may qualify for a tax credit if their domestic partner meets the qualification standards for a dependent.
What is w2 number 14?
Box 14 — Employers can use this W-2 box to report information like: A member of the clergy’s parsonage allowance and utilities. Charitable contributions made through payroll deduction. Educational assistance payments. Health insurance premiums deducted.
How is imputed income calculated?
How does domestic partner imputed income work?
What is imputed income? If you determine that domestic partners don’t qualify as a dependent and they receive health benefits, the contribution you make toward any premium is counted as a type of employee income called imputed income.
What are examples of imputed income?
What Are Examples of Imputed Income?
- Use of a company or employer car.
- Fitness benefits, like a free gym membership.
- Dependent care assistance exceeding $5,000.
- Group-term life insurance exceeding $50,000.
- Moving expense reimbursement.
- Education assistance exceeding $5,250.
Does imputed income affect taxes?
Imputed income is not subject to the federal income tax withholding rules. Employees may choose to have federal income tax withheld on the imputed income or pay what may be due when filing their federal income tax return. Tax penalties may apply if the employee has not withheld enough federal income taxes on the imputed income.
Can you file taxes for domestic partner?
Domestic partner couples cannot file joint federal tax returns, but rather must fill out 1040s separately. However, if you are in a domestic partnership and you live in a Community Property state, then when you file your separate federal tax return you must also report half of all Community Income in addition to all of your separate income.
Can I claim my domestic partner on my tax return?
While this means that same-sex couples cannot file a federal tax return using a married status, the law does not exclude claiming a domestic partner as a dependent. If the relationship between you and your partner violates any state or local laws, you cannot claim your partner as a dependent.
The annual imputed income is calculated by multiplying the number of full months of coverage by the monthly amount and adding a prorated amount for a partial month. Determine the employee’s age on the last day of the calendar year.