California's AB2208 / Domestic Partner Bill

[Guest benefitsnerd]

In California, Employers that offer group health insurance to eligible spouses must also make coverage available to registered domestic partners. In addition, if the employer is providing a contribution for eligible spouse coverage, that same contribution must be made to domestic partners. However, the premium the employer pays for domestic partners is to be considered imputed income to the employee. My question:

How does the employer show the imputed income? Is it calc'd at year end and added to the employee taxable income?

[Guest b2kates]

as taxable income under the internal revenue code it should be reported as earned; i.e. each payroll period and subject to payroll tax withholding at that time. Ultimately it is cumulated and reported on the employees W-2

[Kirk Maldonado]

Does anybody know if there has been any resolution of the issue as to whether there is any imputed income where the emloyee has already elected family coverage and then later adds a domestic partner?

It seems incongruous to have imputed income where the addition of the domestic partner does not result in an increased premium, but that seems to be the way the rules work.

[Guest b2kates]

as a tax issue, it should still be taxable, unless the participant can treat the domestic partner as a dependent.

[Kirk Maldonado]

That is the general rule. Are you aware of any guidance in this specific situation? Causing imputed income where there is no increase in the premium is impossible to defend on a logical basis. I can't imagine the IRS fighting this battle.