2009 Domestic Partner (Spousal Equivalent) Health Coverage Taxable Income and Incremental Costs You and MIT share in the cost of covering a domestic partner and/or his/ her eligible dependent children – the same as someone would for coverage of a spouse and their own eligible dependent children. However, there are additional financial and tax implications to consider with a domestic partner. The Internal Revenue Service (IRS) has determined that MIT’s cost of providing benefits for a domestic partner and their children is considered “imputed income”, which means it is subject to taxes. MIT must report the fair market value of an employee’s domestic partner benefits as wages or “imputed income” to the IRS, resulting in increased taxable gross income for federal and state income taxes. In addition, FICA (Social Security and Medicare) taxes will be withheld from your paycheck. The following is an example of the taxability of coverage if you are enrolled in the Blue Cross Blue Shield (BCBS) Network Blue New England Health Plan. This chart shows the cost of coverage and taxable “imputed income” under each level of coverage. Example of Premium Costs and Imputed Income Monthly Weekly Monthly Weekly Level of Coverage Premium Premium Imputed Income Imputed Income Network Blue New Faculty/Staff Support/Service Staff Faculty/Staff Support/Service Staff England Employee + Spousal Equivalent $433.00 $92.38 $496.00 $112.29 Employee + Employee’s Children + Spousal Equivalent $511.00 $110.04 $496.00 $112.29 Employee + Spousal Equivalent +Spousal Equivalent’s Children $511.00 $110.04 $893.00 $202.17 Employee + Employee’s Children + Spousal Equivalent + Spousal Equivalent’s Children $511.00 $110.04 $893.00 $202.17 All premium deductions are on a pre-tax basis and the “imputed income” is subject to federal tax withholding, state * tax withholding, Social Security tax and Medicare tax. If you are legally married to your domestic partner there will be no Massachusetts imputed income or state tax. You will have to provide a copy of your marriage certificate to: Benefits Department 77 Massachusetts Avenue, Building E19-215 Cambridge, MA 02139-4307 “Imputed income” is calculated on MIT full cost of individual coverage if no Spousal Equivalent’s children are involved. If there are Spousal Equivalent’s children then the imputed income is calculated based on the MIT full cost of Employee + Child(ren) coverage.
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