Office of Human Resources - Benefits Design & Management

Tax Implications
Domestic Partner and Older Child (Non-full-time student) Coverage

Will my deduction for a domestic partner or older child be pre-tax or post-tax?
If you can claim the domestic partner, domestic partner child or older child as a tax dependent on your federal tax return, your deductions will be pre-tax; otherwise, they will be post-tax.

What are the IRS requirements for claiming a person as a tax dependent?

• The person must be a citizen or legal resident of the United States, and
• Reside with you the entire calendar year; and
• Receive at least 50% of their income from you. 

See the Worksheet for Determining Dependent Status if you need assistance.

What documentation will I be required to provide to prove tax dependency?
You must complete either a Qualified Domestic Partner Declaration of Tax Status, an Older Child Declaration of Tax Status, or a Domestic Partner's Child Declaration of Tax Status.

What is the difference between a pre-tax and post-tax deduction?
The amount of a pre-tax deduction is subtracted from your income before tax is figured; it lowers your taxable gross.
Post-tax deductions are subtracted from gross income after taxes have already been calculated.  These deductions also result in imputed income.
 
What is imputed income?
Imputed income is the term the IRS applies to the value of any benefit or service that should be considered income for the purposes of calculating your federal taxes.  If your dependents do not qualify for pre-tax benefits, your deductions will be post-tax and the University’s cost will be taxable to you as imputed income.

How is imputed income calculated?
Imputed income is the difference in the EMPLOYER’S premium cost incurred when your coverage tier changes as a result of adding a post-tax domestic partner or post-tax older child to your plan.

Examples of Imputed Income
Original Coverage Level	Original EE Cost Per Pay	Original ER Cost Per Pay	New Coverage Level	New EE Cost Per Pay	New ER Cost Per Pay	Imputed Income
EE only Tier 1	$13.85	$205.85	Employee + post-tax domestic partner Tier 2	$13.85 (pre) $13.84  (post) $27.69	$412.15	$412.15 - $205.85  $206.30
EE+ spouse Tier 2	$27.69	$412.15	EE + spouse + post-tax older child Tier 3	$27.69 (pre) $41.54 (post) $69.23	$534.46	$534.46 - $412.15  $122.31
EE + Family (2 full-time students) Tier 3	$69.23	$534.46	EE + 2 full-time students + post-tax domestic partner Tier 3	$69.23 (pre)	$534.46	$534.46  -$534.46      Ø (No tier change)