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Every December my employer adds some $7k of imputed income to my last paycheck to account for the cost of employer paid health insurance premiums for my domestic partner. However, my domestic partner is claimed on my taxes each year as my dependent and qualifies as a medical dependent. If the internet is to believed this means that the employer's cost is not supposed to qualify as imputed income for me. So the government has been given an extra $1k+ of my money that they were not supposed to receive.

When I asked HR to have this changed, I was told that they don't take 'medical dependent' status or anything else into account and just add that imputed income to the paychecks of everyone who uses the domestic partner plans. In short, their response was that this is policy and it's not changing.

Can I enter this imputed income as a deduction, or correct my income somewhere on a tax form, when filing my federal taxes so that I receive that money back in my tax return? And as a bonus: how, and on what form, would I go about doing that?

  • Let me restate to make sure I understand correctly: On your last paycheck of the year, your paystub shows an additional $7k added and then withheld to pay for the health coverage of your partner, and this $7k does not appear on your check, but does get added to your W-2 Box 1 for taxable income purposes. Is that a correct restatement of your situation? – Ben Miller Jan 20 '18 at 13:40
  • @BenMiller Yes, I believe so. The $7k is listed as additional "income", and so an extra $1k+ was withheld in taxes, even though no additional moneys were added to my check. – Nicholas Jan 20 '18 at 17:38

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