Domestic Partners - taxable premium

[Guest Stover]

Is the medical premium taxable to the employee if the (so-called) domestic partner does not qualify as an eligible dependent under IRS code 152?

[Linda]

Yes.

[Guest BPalmer]

Quick Question: Has anybody ever actually SEEN the IRS Code 152 which details how a domestic partner may be "claimed" as a dependent, thus exempting themselves from post-tax and taxable benefit ramifications? I have done exhaustive web searching to no avail. A link or phone would be greatly appreciated.

Also, does a DP have to just "qualify" as a dependent, or do they ACTUALLY have to be "claimed" on a prior tax return as such in order to be exempt from taxability? All the information I have found simply says that they must qualify, but that doesn't make sense. Shouldn't you then actually have to prove it by claiming your partner on a tax return?

[Linda]

I think I have run into the same issue. Under 152, dependent status is based on whether the partner lived with the employee for the year and got more than ½ of his or her support from the employee during the year. In other words, the determination is made at the end of the year. However, the determination as to whether health insurance benefits for the partner are taxable needs to be made at the beginning of the year. Looking at a prior year tax return does not resolve the issue for the current year. So, you may end up having to amend a Form W-2. How have you dealt with this?