[konradsa]

Hi,

Great forum!

My employer recently started taxing me for the health care benefits received for my (opposite-sex) domestic partner as imputed income.

Now I read that according to Internal Revenue Code:Sec. 152. my domestic partner can qualify as a dependent if:

Generally, to qualify as an IRC Section 152 dependent (as modified by Code 105(b)) of an employee during a given tax year, the domestic partner and partner's children must be a "qualifying relative" of the employee. To be a "qualifying relative", the domestic partner must meet the following requirements:

1. Have the same principal place of abode as the employee for the full tax year (January 1 through December 31), except for temporary absences such as vacation, military service, or education. If the partnership dissolves other than on December 31, for reasons other than the death of the domestic partner, the tax exclusion is lost for the entire year. If the relationship terminates due to the death of the partner, the partner would continue be treated as a dependent for the entire tax year;
2. Receive more than half of his or her support from the employee;
3. Be a U.S. citizen, U.S. national, or a resident of U.S. Canada, or Mexico; and,
4. Not be the employee's (or anyone else's) "qualifying child" under Code Section 152.

Taken from: University Of Michigan Benefits Office

Since she is a full time student and lives with me, I think she qualifies as a dependent under the rules outlined above. Is this information correct? If yes, what do I need to do to stop my employer from reporting the imputed income?

Thanks!
-- Sascha

[tickle]

In order to be classed as a dependent, doesn't this person have to be related ?

[konradsa]

@tickle: Sorry, I cut off too much of the top of the quote. I added some more text, please look at my original post again.

It seems that there is an exception, where domestic partners can qualify as relatives ("qualifying relative" ccording to IRC Section 152 dependent (as modified by Code 105(b))). My question is whether this applies to me and if yes, how do I have to go about and let my employer know.

[tickle]

You still haven't answered my question, is he/she a qualifying relative? Is he/she a servant?
Does this tax break really make a big difference to your tax return? Sorry, I don't get it. I used to get a lot of tax breaks from RevCan when my mother lived with us because we ABSOLUTELY had a good accountant WE PAID FOR. His advice was minuscule as compared to the returns. But as you can understand, it was spouses filing and I was her sole caregiver; it made a diference.

I could possibly not understand your filing procedures, why does your employer file and not you? Is this your company and you are tax exempt of some things you claim for because of this? My husband is self employed with a company registered with our government and we are partners, but there are corporate taxes here in Ontario and personal taxes and we file both.

Sorry, still some unanswered questions, and maybe when you do get around to giving all particulars some experts here will be able to answer all of that for you.

[konradsa]

Never mind,

I just realized that she makes more than the exemption amount in a year in gross income (and she is older than 24), so she will not qualify anyway as a dependent. I thought she would be able to deduct education credits from her gross income, but I guess this is not possible.

[AtlantaTaxExpert]

You got it right. If she makes more the exemption amount, you CANNOT claim her aa a dependent.

[konradsa]

Thanks anyway, AtlantaTaxExpert! Very much appreciated!

[AtlantaTaxExpert]

Glad to help, though my input on this post was minimal!