Imputed income domestic partner Married mid year

Forum|Forum|4 years ago
November 27, 2021
2 replies
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I have included my domestic partner on my insurance and see imputed income on my paystub. If we get married in the middle of the year will we get reimbursed for the imputed income paid before that? Or do we not get anything back?

I was under the impression that tax-wise, marriage counts for the whole year as long as it happens before Dec 31, but I could see this being a special case because it involves the company paying for a benefit on my behalf.

Critter-3

That is a rule for the tax return but not for the imputed income situation .... ask your employer but the answer is probably no.

Opus 17

Employee

No. This is one situation where the marriage is not retroactive to the whole year. Medical insurance premiums that are paid by your employer to cover someone who is not your legal spouse or your tax dependent (such as a domestic partner) are considered taxable income to you, even if you never see the actual money because it is sent directly to the insurance company. You can stop the imputed income situation if you inform your employer of the legal marriage within 60 30 days of the marriage. But the money that was previously counted as taxable income because the person was not your legal spouse at the time the insurance premiums were paid (imputed income) is still counted as taxable income to you.

[Edited to correct: You have to notify the employer benefit plan within 30 days of a "change of status event" to change your plan. Otherwise, you have to wait for the next open enrollment. US Treas. Reg. 1.125-4.]

aherasimovich

Can you please point to official IRS document which says that is 60 days? I tried to do in company where I work but they told me it is 30 days, but I missed by 5 days 🙂

Opus 17

Employee

@aherasimovich wrote:

Can you please point to official IRS document which says that is 60 days? I tried to do in company where I work but they told me it is 30 days, but I missed by 5 days 🙂

Yes, I'm sorry, it is 30 days. I may have been thinking of a different tax provision. Under Treasury Regulation 1.125.4, you have 30 days after a "change of status" event to change your benefit election. If you miss that window, you have to wait for the next open enrollment period.

https://www.law.cornell.edu/cfr/text/26/1.125-4