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.”

Is domestic partner coverage taxable?

California affords the same rights to registered domestic partners as to married individuals. Any amounts spent on domestic partner healthcare is exempt from California taxes under Revenue and Taxation Code section 17021.7.

Is a domestic partner a spouse for tax purposes?

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.

How do you calculate imputed income on domestic partner benefits?

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.

Can a spouse be an imputed income domestic partner?

If you get married, your spouse is entitled to certain tax-free employee benefits. Or, if your DP can be your tax dependent, their benefits can be tax-free. But because your DP is not your spouse and not your dependent, your employer can’t provide tax-free benefits for them. Let’s say as an example,…

Do you pay taxes on your domestic partner insurance?

However, a domestic partner is not considered a spouse under federal law. As a result, if you elect to have your partner covered under your plan, you will pay income tax and Social Security payroll tax on the portion of the insurance premium that your employer contributes to your partner’s policy.

When is health coverage provided to a domestic partner?

When health coverage is provided to a domestic partner (or to his or her child) who is not the employee’s Code §105 (b) tax dependent depends on how coverage is paid for (pre-tax or after tax).

When does a domestic partner cease to qualify as a dependent?

If a domestic partner ceases to qualify as a dependent during the tax year, the employer is required to include the value of employer-provided domestic partner coverage provided since the beginning of the tax year in the employee’s taxable income.