How do you report imputed income for domestic partner benefits?
Taxable Domestic Partner Benefits The employee will have imputed income reported on Form W-2 equal to the FMV of the domestic partner’s (or child’s) coverage. This amount will also be subject to income tax withholding and employment taxes.
Where is domestic partner imputed income reported on w2?
Box 12
Report health benefits for same-sex couples correctly. The entire cost of the health benefits, including both the non-taxable portion and the “imputed income” portion, should be reported in Box 12 with code “DD.”
How are domestic partnership benefits taxed?
How will the domestic partner benefits be taxed? Under federal tax law, the portion of an insurance premium that your employer pays for your coverage is not taxed as income. If your partner is an IRS-qualifying dependent on your federal tax return, these benefits would not be taxed.
How does imputed income work in domestic partnership?
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. Scenario – CS Employee Adds Domestic Partner (DP) to Benefits–DP Not a Dependent
How much income does a registered domestic partner have?
Because registered domestic partners each report half the combined community income earned by both partners, it is unlikely that a registered domestic partner will have gross income that is less than the exemption amount.
What kind of income is considered imputed income?
Under federal law, non-cash compensation (also known as imputed income) is considered taxable income. The federal government considers domestic partner health benefits as imputed income. If you enroll a domestic partner and/or their dependents in health benefits, the value of those benefits may be added to your gross biweekly salary.
Can a registered domestic partner be claimed as a dependent?
If a registered domestic partner’s (Partner A’s) support comes entirely from community funds, that partner is considered to have provided half of his or her own support and cannot be claimed as a dependent by another.
