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My girlfriend and I are moving to NYC. She is self employed and comparable health insurance in NY will cost her 2x as much as in Texas, where we are now. If we register as domestic partners it seems she can use my company health insurance. What are the pros and cons of forming a domestic partnership? Are there any tax implications, at the city, state, or federal level?

  • Are you a same sex couple? Domestic partnerships are not recognized on Federal level. – littleadv Jun 4 '13 at 18:35
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    @littleadv No, we are opposite sex (which seems to be a valid form of domestic partnership) – David Jun 4 '13 at 18:42
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    @littleadv because we aren't there yet. This is only being considered so my girlfriend can get good health insurance cheaply/for free – David Jun 4 '13 at 19:31
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    @littleadv Uh, marriage appears to be a different status with the state. At least with NY state. And it appears they can be dissolved with a small fee by either party whether the other consents or is ever aware or present or not. And there appears to be no basis for arguing over the spouse's money in a domestic partnership (although I'm trying to confirm things like what I'm saying) – David Jun 4 '13 at 19:50
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    A few years back, I was able to use that benefit for my opposite sex fiance. Since we weren't married, Maryland and Federal taxes were taken out as a taxable benefit. So the portion the company paid towards the premium was added to my paycheck, then the taxes were computed and withheld, and then the payment came out. – Aaron D. Marasco Jun 5 '13 at 1:00
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Domestic partnerships were invented for people who cannot get legally married (same-sex couples). While you can become domestic partners as a hetero couple, I can't see why would you want to (although I'm not a lawyer, talk to a family lawyer on these matters).

The main difference between domestic partnership and marriage is the Federal recognition. You can only get tax benefits and immigration benefits if you're married (and that's a major reason why many gay people are so upset about not being able to). RDP's are not legally married, so they don't get the Federal benefits that married couples do.

Why does it matter to you? Because the insurance is a benefit. You pay it pre- tax from your wages. But if you want it to cover your partner, and you're not married - it is taxed. So the insurance coverage provided by your employer to your partner is taxable income to you, unless you're married.

In addition, RDP's from one state may not be recognized in another (if the RDP definition is different or the state doesn't allow RDP's), and benefits may differ.

Check with a lawyer proficient in family law, I'm not a lawyer. I'm not a tax professional either - for tax issues talk to a EA or a CPA licensed in your state.

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