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Imputed Income Domestic Partner Health Coverage - Pennsylvania

Forum|Forum|3 years ago
April 14, 2023
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I’m currently retired. In 2022 I started covering my girlfriend as a domestic partner under my retiree health insurance. The company from which I retired sent me a W-2 with imputed income on it. The code in box 12a is ‘C’, which decodes as taxable cost of group-term life insurance over $50,000. Since I do not have group-term life insurance, I questioned it. They told me it is for the cost of the health care coverage for my partner. I was told that Federal income tax regulations require that unless a partner is the employee’s dependent, the value of health care coverage provided to my partner is considered taxable income to me.

When I did my taxes with Turbo Tax, the program correctly included that imputed income on my Federal tax return. However, Turbo Tax did not include the imputed income on my Pennsylvania state return.

My question is this: Is the imputed income not taxable in Pennsylvania? If it isn’t, I should be good to go. If it is supposed to be taxable, how do I get Turbo Tax to include it as part of my income?

Thank you very much.

Best answer by DianeW777

No, the code C is eliminating it from taxation on your Pennsylvania (PA) return because that is an item that is not taxed to PA (Group Term Life Insurance). Since your employer used this code, then you should file your return as not taxable to PA.

Gross Compensation for PA

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DianeW777Answer

No, the code C is eliminating it from taxation on your Pennsylvania (PA) return because that is an item that is not taxed to PA (Group Term Life Insurance). Since your employer used this code, then you should file your return as not taxable to PA.