Employer contributions for a domestic partner's health insurance benefits would no longer be considered taxable income, under a bill recently introduced by Rep. Jim McDermott (D-Washington).
Under existing law, an employer's contribution for the health insurance premium for an employee's spouse is not considered to be taxable income to the employee, but coverage for a domestic partner is, he explains. The Tax Equity for Health Plan Beneficiaries Act (H.R. 1820) would change that.
"This glaring inequity can add thousands of dollars to an employee's taxable income every year, and result in higher federal income taxes, when the only difference is one household includes a married couple and another household includes a domestic partnership--that's absolutely wrong," McDermott says.