June 12, 2014 3:50 PM Subscribe
I hit the holy grail and have a new position with full benefits, including full coverage for domestic partners. I have a partner who lives with me, but we are still fairly newish and are not ready to get married. I have to enroll us in the benefits very soon, like now. The problem is, the queer tax (I guess now the Not-Legally-Married tax) on my partner's benefits.
I understand that according to federal tax code, the money my organization spends on my not legally married to me partner is counted as income for me, and so they deduct tax from my check, to pay for her benefits. This will come out to more than $500/month being taken from my pay.
Alternately, she could decline my benefits and enroll in Obamacare. This would cost her less (I think like 300, don't have exact number in front of me) but also provide not as good coverage with higher copays etc. Think Bronze instead of Gold level.)
We are trying to figure out what to do.
I'm wondering: have you dealt with this problem? What did you end up doing? I have heard that if I were to cover her, then she could reimburse me for the tax expense I incur, and then she herself could write off that reimbursement. Have you done that?
Are there other questions I should think about, or information I should gather, before I talk to a tax specialist or sign any paperwork at work?
I know there are tax professionals in this world. Not to mention lawyers and financial advisors. I will likely utilize the services of one or all of these professionals. However, at this moment, I am not going to. I want to hear from anyone here who has direct experience with this issue, and can help me understand, in broad strokes, what the benefits and downsides of various scenarios are now.
So please don't steer me to a tax pro at this point unless you can recommend someone specific in the SF Bay Area who has dealt with this specific issue and is cheap. Thanks!