Domestic partners mailing list FAQ (last edited 5/12/94) (*) WHAT IS THIS LIST? Domestic@cs.cmu.edu is a list of people interested in sharing information about domestic partner benefits. (*) WHAT ARE DOMESTIC PARTNER BENEFITS? Many employees grant benefits, such as health care insurance, to married-spouses of employees. People who are in committed relationships cannot enjoy these benefits because they are not sanctioned by the state. Gays and lesbians are particularly affected since they cannot marry. Granting equivalent benefits to domestic partnerships recognizes this discrimination against same-sex couples and seeks to correct it by defining when committed partners will be treated as spouses for the purpose of granting employee benefits. (*) HOW CAN I SUBSCRIBE/UNSUBSCRIBE? MAJORDOMO is a program that automatically maintains mailing list. CMU has several majordomo servers. Requests for the domestic partner mailing list should be send to MAJORDOMO-DOMESTIC@CS.CMU.EDU. The subject line can be left blank. The body of your message should be subscribe domestic or subscribe domestic To unsubscribe, your message body shoiuld be unsubscribe domestic To get this faq, type info domestic (*) WHO HAS DOMESTIC PARTNER BENEFITS? Many cities, universities and companies offer domestic partner benefits. Examples include New Orleans, New York City, Apple, Borland, Silicon Graphics, Viacom, etc. There is a large list of companies that is being maintained on-line. The list is updated periodically. The most recent version is available by anonymous ftp from ftp.cs.cmu.edu in the file user/scotts/domestic-partners/companies.ps (yes, this is a postscript file.) (*) IS THERE AN ARCHIVE OF MESSAGES FROM DOMESTIC? No. But much of the information is available from other on-line sources. (*) WHAT ARE THE OTHER ON-LINE RESOURCES? Scott Safier maintains an archive of interesting messages on ftp.cs.cmu.edu. Many of these messages are from domestic@cs.cmu.edu. The archive can be accessed by both anonymous ftp and mosaic. The mainpage for mosaic is http://www.cs.cmu.edu/user/scotts/domestic-partners/mainpage.html. Ron Buckmire maintains a library of information of interest to gay, lesbian, bisexual people on vector.intercon.com. It is called the QRD (Queer Resource Directory). It has a large section on DP issues. There is a monthly FAQ about the QRD that is posted monthly to domestic@cs.cmu.edu. The QRD supports ftp, gopher and other retrieval protocols. (*) FTP? MOSAIC? FAQ? DP? (or why do you talk in initials?) DP is short for "domestic partners". I'm a lazy typer. FAQ is short for "frequently asked questions". FTP is a program to transfer files (file transfer protocol). It is the way people move files across the internet. Normally you need to have an account on the remote machine, unless it allows anonymous logins. For example, to retrieve the companies list from Scott at Carnegie Mellon, you would type (capital letters are typed at you) ftp ftp.cs.cmu.edu LOGIN: anonymous PASSWORD (YOUR USERID AND HOST): corwin+@cmu.edu cd user/scotts/domestic-partners get companies.ps quit The last three commands put you in the proper directory, transfer the file and exit the program. MOSAIC is a program available from the Super Computer Project at the University of Illinois at Urbana-Champlaine(sp?). It is a tool that allows you to access documents from any internet site in a uniform manner. Names of files are specified in a format called URL. For example, the URL for the domestic partner information located at CMU is http://www.cs.cmu.edu:8001/afs/cs.cmu.edu/user/scotts/domestic-partners/mainpage.html. (*) WHAT OTHER RESOURCES EXIST? ACLU There is an on-line collection of civil liberty statements. It includes Briefing Papers from the American Civil Liberties Union. (The ACLU material is made available by permission of the American Civil Liberties Union) If you have gopher, the archive is browsable with the command: gopher -p academic/civil-liberty gopher.eff.org The archive is also accessible via anonymous ftp and email. Ftp to ftp.eff.org (192.88.144.4). It is in directory "pub/academic/civil-liberty". For email access, send email to archive-server@eff.org. Include the line: send acad-freedom/civil-liberty where is a list of the files that you want. File README is a detailed description of the items in the directory. For more information, to make contributions, or to report typos contact J.S. Greenfield (greeny@eff.org). NGLTF (National Gay and Lesbian Task Force) has an initialiative on the Workplace which has compiled information about domestic partnerships. Their address is: NGLTF 1734 Fourteenth Street, NW Washington, DC 20009-4309 202/332-6483 202/332-0207 (FAX) LLDEF (Lambda Legal Defense and Education Fund) also has information on domestic partnership policies. LLDEF LLDEF 606 S. Olive Street 666 Broadway Suite 580 New York, NY 10012 Los Angeles, CA 90014 213/629-2728 212/995-8585 213/629-9022 (FAX) 212/995-2306 (FAX) The Hawaiian Equal Marriage Rights Project is the contact for the same-sex marriage case currently in the Hawaiian state court system. Hawai'i Equal Rights Marriage Project Gay and Lesbian Community Center 1820 University Ave. Honolulu, HI 96822 (*) WHAT ARE THE COSTS TO THE EMPLOYER? The University of Iowa conducted a study of the costs associated with offering domestic partner benefits. Much of the study deals with the costs of HIV. The study finds that fear of high health care costs associated with HIV are unwarranted. There are two main reasons for this. First, HIV disease is not considered to be a catastrophic illness. Second, the number of same-sex couples which take advantage of domestic partner benefits is small. The largest percentage participation in a domestic parnership benefits plan is the City of San Francisco, where 1.86% of its workforce registered a domestic partner. Apple Computer is another example, where 45 people out of a work force close to 9,000 have registered a domestic partner. (*) WHAT ARE THE COSTS TO THE EMPLOYEE? Domestic Partner benefits are taxable. Below is a discussion that occurred on the mailing list regarding the subject of taxation. From: Ronald Hayden I don't know of a comprehensive way to avoid taxes, but here's something I found out recently: If you provide all of the monthly "support" for yourself and at least 51% of the support for your partner, and if you have both had the same place of residence for the full year, then you can declare your partner a dependent for these purposes and do not have to report the benefits as income. Support is defined as: "For purposes of determining whether or not an individual received, for a given calendar year, over half of his support from the taxpayer, there shall be taken into account the amount of support received from the taxpayer as compared to the entire amount of support which the individual received from all sources, including support which the individual himself supplied. The term "support" includes food, shelter, clothing, medical and dental care, education, and the like. Generally, the amount of an item of support wil be the amount of expense incurred by the one furnishing such item. If the item of support furnished an individual is in the form of property or lodging, it will be necessary to measure the amount of such item of support in terms of its fair market value." -- Ron --- From: Helen Raizen Okay, so does that mean one actually claims the partner as a dependent? If so, that has tax consequences for the partner, if she/he has taxable income, right? Or is it sufficient to be able to claim the partner as a dependent, to forgo the tax consequences of the medical benefits. New question: If one member of a partnership has children and is already paying for/receiving the benefit of a family health insurance plan, then is there taxable income in adding the partner to that health insurance plan? Thanks in advance, Helen --- From: Ronald Hayden Here is the info a tax person gave me. PLEASE NOTE: I can't guarantee the accuracy of this, and no one should take action on this sort of information without consulting an expert on tax law. -- Ron At this time Congress has defined spouse and dependent yet has not defined domestic partner. For Federal Tax purposes unless a marriage is allowed by state law, the partner is not eligible for exclusions and exemptions normally afforded to spouses. At this time, California law prohibits same sex marriages. A recent IRS private letter ruling (PLR 9231062 5/7/92) ruled "that for an employee to exclude from income the cost of employer-provided health coverage for a domestic partner, the domestic partner generally must meet all the requirements for qualifying as the employee's dependent." The IRS stated that a domestic partner cannot qualify as a dependent of an employee unless the partner meets both of the following requirements: 1) The partner receives more than half of his support for the year from the employee and 2) The partner either is related to the employee as: * A son or daughter or a descendant of either * A stepson or stepdaughter * A brother, sister, stepbrother, or stepsister * The father or mother, or an ancester of either * The stepfather or stepmother * A son or daughter or a brother or sister * A brother or sister of the father or mother * A sone-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in law OR The partner, for the taxable year of the taxpayer (employee), has as his principal place of abode the home of the taxpayer (employee) and is a member of the taxpayer's (employee's) household for the entire taxable year. According to the IRS, whether a domestic partner satisfies the definition of "dependent" depends on all the facts and circumstances of each case. Treasury Regulations state, "For purposes of determining whether or not an individual received, for a given calendar year, over half of his support from the taxpayer, there shall be taken into account the amount of support received from the taxpayer as compared to the entire amount of support which the individual received from all sources, including support which the individual himself supplied. The term "support" includes food, shelter, clothing, medical and dental care, education, and the like. Generally, the amount of an item of support wil be the amount of expense incurred by the one furnishing such item. If the item of support furnished an individual is in the form of property or lodging, it will be necessary to measure the amount of such item of support in terms of its fair market value." OK, what does all this IRS mumbo-jumbo mean... 1) Domestic Partners, at this time, cannot be considered a spouse. The can only change if Congress decides to address this issue. 2) Your partner can be considered a dependent if you provide greater than 50% support (as defined above) AND he is a member of your household for the entire taxable year. After this, I asked about the fact that I had heard a person could only qualify as a dependent if they made less than $2,350 in the year. Here's the answer I got: The IRS has two definitions for dependents... The first definition is all the information I sent you yesterday. Should your partner qualify under those two criteria, you will not have to include the cost of his health care coverage on your W-2. The support test may be a difficult hurdle for some. The second definition is a set of five criteria (2 of the five are the first definition above) that must be met in order to claim the dependency deduction on the tax return...two separate issues. (It may be easier to understand this second definition by looking at your 1992 income tax return...look at Form 1040, page 1 line 6a-6e and page 2 line 36.) The $2,350 income limit is one of these five criteria. The fourth is that your partner must be a US citizen or resident alien or a Canadian or Mexican resident. The fifth is that he cannot be married and file a joint return with his spouse. Your partner may qualify as your dependent for exclusion of the health coverage cost as explained in yesterday's email. He may not provide you a deduction on your 1993 return if his income is greater than $2,350 or he fails any of the other tests. -- From: Bill Piexoto The VALUE OF BENEFITS refers to the actual insurance costs of the benefit added to the employees gross. For example, just like the Life Insurance premiums for insurance greater than 50K must be added to an employees gross salary for tax purposes. Because the company cannot deduct the premiums for DP benefits as they can for spouses, the additional premium expense is added to the employees gross. Cadence does apply credits to the premiums that is applicable to the same credits applied for spouses of employees. The additional cost to me to enroll my partner will add $1200.00 to my annual gross for tax purposes. I don't have to pay this $1200, the company does, but I am responsible for the additional taxes due to the premiums for medical, dental, and vision being added to my gross. ---- From: Susan Johnston There are tax laws that govern the treatment of benefits provided to employees by employers. For the most part, employers can provide employees and their legal dependents benefits on a tax-free basis. Because domestic partners are not currently recognized as legal dependents by the IRS, the benefits to domestic partners cannot be provided tax-free. Cadence is required to report the VALUE OF BENEFITS for domestic partners as taxable income on an employees' W-2 (less any after-tax contributions the employee makes for that coverage) in a similar manner that premiums for life insurance coverage in excess of $50,000 are reported. --- From: "Tom Chatt" You are taxed on the "value of the benefits", which as Bill explains, is the cost of the insurance premiums, regardless of how much you might *use* the insurance. For example, if your company has a group plan with Aetna which costs them $3000/yr per insured individual, then an employee and spouse would receive $6000 in medical benefits per year which is not included in taxable income. An employee and a covered domestic partner, however, would receive $6000 in benefits, $3000 of which would be included in the employee's taxable income. Whether you or your partner remained healthy all year, or whether one of you was hospitalized and had $20,000 in costs covered under the plan does not matter. The only sticky issue has been how to evaluate the value of the benefits. The obvious thing to do would be to value the benefits at the amount that they cost the company to provide (ie., the premium amount). However, the IRS, at least at one point in time, was being obtuse about insisting that the taxable value of the benefit had to be the "fair market value", which they defined as the amount it would cost the individual to go out and purchase equivalent benefits independently. This stand was obnoxious both to the company and to the individual. Obnoxious to the individual because this usually led to a higher evaluation and thus higher taxes (ie., what costs your company $3000 under a group plan might cost you $5000 to buy as an individual, thus causing $5000 of taxable income to be added to your W-2). Obnoxious to the company because they were resposible for figuring out and documenting what a "fair market value" might be. In a private letter ruling (which has no binding precedential value for other cases), the IRS allowed the City of Seattle to evaluate DP benefits at the City's cost, rather than at this obtuse "fair market value" definition. However, I had heard that they had still been insisting on the "fair market value" for everyone else. Anyone heard anything more recent on this? ---- From: Susan Johnston Thanks, Tom, for the info re the possible interpretations of what the "value of benefits" is worth. This aspect sounds like it could be quite costly. I hope it doesn't come up as an issue when we negotiate with HR. I spoke with a (gay) benefits manager at another company who gave me the breakdown re "value of benefits" in the following way. (I've adapted for my situation at SAS Institute.) When I went out on an extended maternity leave 3 years ago, SAS told me I'd have to pay the full premium ($440 per month) to maintain my health insurance package. For the sake of argument, I'm going to use this (out-of-date) figure as a starting point. I would be insuring my partner and 2 children. The family insurance premium (employee + 2 or more family member) costs SAS $440 per month. I subtract my monthly payment for family insurance ($85) from this figure (440-85). Then I subtract what it costs SAS for my (the employee's) individual insurance coverage (let's say $200--I have no idea what it is). Therefore: 440-285 = 155 So, $155 would be added to my gross (not net) taxable income per month (155 x 12), so my gross income would increase by $1860. This amount is enough to move me into another tax bracket but probably still less than the $200-400 some of us are paying for health insurance for our partners and children. Hope this info is helpful to others. Each individual will have to check with her/his employer about the cost of their company's premium. Also note that the amount you pay under family insurance will vary depending on how many family members you claim. Most companies have one rate for a spouse or 1 child, and another rate for 2 or more members. Susan Johnston ---- From: Helen Raizen I want to add another two cents to this discusssion. So far, my question is hypothetical, but if my partner or I ever get dp benefits it would become real. Since we have two children, we already qualify for family health insurance. If there were no difference in what the employer pays for a policy to insure my dependent child and me and what they pay to insure all four of us, then by the company cost rule, I take it that we would have no additional tax liability. Is this true? Of course, by the fair market value rule, we would have additional tax liability and it would be considerable. Do you all agree with this analysis? Helen ---- From: "Tom Chatt" Before I get someone into trouble, I should clarify a minor terminological nit that I inadvertently started. Both "rules" seek to establish a "fair market value", and it would torque the IRS to think that any evaluation is coming up with something other than a fair market value. It would be better if we called things the "actual company cost rule" and the "hypothetical individual cost rule". Both are methods of evaluating fair market value. *If* it is true that it costs your company nothing to add a spouse and another child (I take it that your company currently only recognized *one* of your two children as *yours*?), then you're right, there shouldn't be any additional tax liability under the actual company cost rule. I guess I'm somewhat surprised at the premise. Is it really true that it costs your company no more to insure employee+spouse+2children than to insure employee+1child? Susan Johnson had suggested that it is common for insurers to draw lines between 1 spouse or dependent and 2 or more spouse or dependents. You would be crossing that line, if I understand your situation correctly. However, if some insurers only draw lines between no dependents and some dependents, you would certainly have an argument for no additional tax liability under the "hypothetical individual cost rule" as well as the "actual company cost rule". I'm just still aghast at the notion that insurance companies would give something for nothing. :-) Tom Chatt --- From: Helen Raizen Thanks Tom for clarifying the terms. No, the insurance companies don't give something for nothing, but around here, the HMO types offer only two plans, individual and family. So a family pays the same no matter how small it is. My partner and I are forced to pay for two family plans that usually would cover two adults and 1-3 children each. I see the whole issue as a matter of equity. Effectively, I get less pay than a married with children co-worker who can insure her entire family for the amount I spend to insure half of my family. The way I would describe what the insurance companies do is that they "take something for nothing", that is they take payment for covering a family of any size and use it to cover only an adult and a child. In fact, since we are forced to have two family plans at the same HMO (in order that our children can be seen by the same pediatrician), the HMO is really screwing us. And get this, when we went to couples therapy, they counted the visits against both of us. But I digress. The good news is that those of us who are already paying for a family health insurance plan should be able to add dp coverage without incurring additional tax liability. Hurray! Helen ---- From: Susan=Spielman%Eng%Banyan@hippo.banyan.com Subject: DP coverage To: domestic@cs.cmu.edu Cc: Status: R Following the discussion that has been going on, I'm a bit confused about the fact that people are referring to an increase to gross because of the fact that they added a dependant onto their plan. I thought that this only effected DP because there is no (so called) legal binding of the relationship. What would result in this situation: 1)you are married and have coverage for you and your spouse (1+dependant) 2)you get divorced (whatever) 3)you live with a DP for a year and add that person to your policy (which covers domestic partners) (1+dependant...still) Are you taxed in the same way for 1 & 3? I thought that in (1) you AREN'T taxed because of the IRS rules and in (3) you are even thought the coverage you are receiving is the same. Is this correct?? I'm about to start dealing with my company on how we are going to approach this issue and I want to make sure that I work out a policy that will be the LEAST added burden onto employees. Thanks. Sue Spielman ----- From: jeff bowles ``Are you taxed in the same way for 1 & 3? I thought that in (1) you AREN'T taxed because of the IRS rules and in (3) you are even thought the coverage you are receiving is the same. Is this correct??'' It's really pretty simple: the IRS allows businesses to deduct (as business expenses) the cost of providing coverage to you and your family (as recognized by the IRS). If they want to extend coverage for non-family (again, in the IRS definition) benefits, that's okay --- but the business has to report this as a `taxable benefit' to you, the employee. Some businesses adjust your pay accordingly, to compensate for the tax burden. Some don't. (Mine doesn't.) There is a trap in here: 1. If the business compensates for the tax burden, then this can be called a "special benefit for gays/lesbians" because "they make more money than a straight person." (I hear you shriek that this is absurd, but the homophobes have perpetuated the notion that "gay rights are special rights" and this plays into that.) Just be aware of this, and if you ask for this, immediately acknowledge that while it looks like "a special priviledge" it's actually not. But the masses might not hear that. 2. If your business doesn't compensate for the tax burden, it's still not equitable. At my company, we flat-out told the HR people "that's our beef with the IRS, and we can't expect you to change the tax laws." If you only have so much energy/time to spend, and given the choIce between dealing with the "tax burden" or making sure that there's not inequity in other areas (like "DP's have to wait N months to be covered, but spouses don't"), I'd go with the latter. Jeff Bowles --- From: Sharon Solstice This conversation is about the IRS. No matter how positive and progressive your company is, the IRS isn't. If you cover someone who is not a spouse or legal dependant (refer to the recent discussion re: the change in rules for financial dependants) the IRS sees that coverage as imputed income, not subject to the tax exemptions that apply for self and family members. You and your company can try to be creative and work around this, but tackling the IRS is a whole other issue that needs to be addressed, and there's not much of a workaround to the existing tax rules. My understanding is that even employees with family coverage will see the imputed income on their W-2 if they choose to add a dp. Even though there is no additional cost to the company (family is 3 to infinity), there is additional benefit to the employee and that's what the IRS sees. ---- From: James Hansen | 1)you are married and have coverage for you and your spouse (1+dependant) | 2)you get divorced (whatever) | 3)you live with a DP for a year and add that person to your policy (which | covers domestic partners) (1+dependant...still) | | Are you taxed in the same way for 1 & 3? I thought that in (1) you AREN'T | taxed because of the IRS rules and in (3) you are even thought the coverage | you are receiving is the same. Is this correct?? It is my understanding that you are correct. I've read reports from other companies/municipalities that show that once DP benefits are offered to employees, some hestitate to take it because of the added tax burden imposed by the IRS. Benefits received by a DP are treated as ordinary income and taxed accordingly. Think of it this way: Is it cheaper to pay $40 every six months for my partner's dental checkup, or pay an additional $10 every two weeks and pay taxes on the $80? (Might as well pay the $80 and forget the DP benefit). This, of course, assumes your DP is in good health and doesn't need medical coverage during the year. On the other hand: If I know my partner will need surgery this year, is it cheaper to pay for it all out of pocket, or pay the additional $10 every two weeks, the deductible, the maximum out of pocket expense, and taxes on the company payed benefit? Emergencies are a different story. For real peace of mind, I suppose one should take the DP benefit and not worry about the additional taxes. jh ----- From: Michael Bryan James wrote: Think of it this way: Is it cheaper to pay $40 every six months for my partner's dental checkup, or pay an additional $10 every two weeks and pay taxes on the $80? Actually, you'd pay taxes on the amount your company pays towards your partner's insurance premiums, not on the amount of expenses covered by the insurance. Taking a real-life example of what my company pays: Monthly insurance premium costs (PPO) Type of Employee Company Total Coverage Costs Costs Costs ----------------------------------------------- Employee $35 $140 $175 Employee+Spouse $75 $310 $385 Unfortunately, Resonex does not offer DP benefits. But let's assume for the sake of argument that they did. Then if I signed up my partner, the additional insurance premium paid by the company would be $310-140, or $170/month. Assuming that for tax purposes they used the "Actual Company Cost" method of determining fair market value (as discussed earlier), then I would have to pay taxes on an additional $170 * 12, or $2040. Figuring an approximate marginal tax rate of 40% (Fed+State), I would pay approximately $816 in additional taxes. (If my marginal tax rate was 25%, I'd pay about $510.) I would be taxed thusly if Richard made no claims, or if he made $20000 in claims, or anything in between. So my total annual cost to add my partner would be $40/month (from paycheck) plus $816 in taxes, for a total annual cost of just under $1300. [Showing the inequity for not being "legally married", as a straight married couple would only have to pay $480 to receive the same benefits. :-/] This basically leaves me with three choices: 1) Go with the company plan. For annual out-of-pocket costs of $1300, my partner would receive full medical, dental and eye-care coverage. We would have to pay some small amount on the actual medical bills ($5 co-pay for doctor's visits, 20% of dental costs and 10% of medical costs until the deductible was met, etc.), but this generally wouldn't amount to very much. 2) Purchase insurance separately. This can be *very* expensive. Currently, Richard is paying $110/month just for Major Medical insurance, or about $1320/year. This has no coverage for dental, normal medical, or eye-care, unlike my insurance through Resonex. There might be better coverage available, and we are in fact going to look into this, but that's the best price he got when looking on his own two years ago. 3) Don't purchase insurance, and pay for *all* medical expenses out-of-pocket. Given options 1 and 2, there really is no choice. Option 1 is just marginally cheaper than option 2, and provides many more benefits. So it really comes down to options 1 and 3. And that's the basic gamble *everyone* has to make regarding insurance: is it worth it to potentially save $1300/year, and run the risk of high medical bills for unexpected problems? In my opinion, no. A single illness or accident could easily exceed the cost of the insurance. For most people who actually have the choice, it will usually boil down to a case of insurance vs. no insurance. Thanks to the wonderful health insurance system we have right now, it's virtually impossible for somebody to get the same level of coverage in an individual policy as what can be obtained through a company policy for the same price. [Are you listening, Mr. & Mrs. Clinton?] The price break for different people will likely be radically different from my case above, since there are so many variables involved. But the net result is that usually it's cheaper to take a DP insurance plan and pay taxes on it, rather than paying for an individual insurance plan. Emergencies are a different story. For real peace of mind, I suppose one should take the DP benefit and not worry about the additional taxes. (*) Is there anyway around the IRS? No, but there is a way to work with the IRS. Here is some correspondance about Private letter rulings from the IRS > Hello all, > > It's that infamous time of the year! Oh, you mean you didn't need to be > reminded of that? Me neither, especially with a tax bill $1200 heavier than > I would like due to the the value of my lover's benefits being added to my > total income. I love having the benefits, and with Frank's heart attack > scare, I realized how much better off we were with this plan than the > Kaiser benefits offered through his place of employment. I am less than > twilled with the idea that we have to pay more taxes because of the Federal > Government's denial of the legal status of our relationship. > > Want to help do something about that? How about moving forward to challenge > the IRS insistence that domestic partner benefits are taxable? What would > be the best way to approach this? Does anyone out there on this list have > experience with this, or posses the skills to assist us? There are two > attorneys who have volunteered their assistance, but neither has particular > experience in tax law. Are you familiar with this issue, or do you know > someone who is, and can meet/correspond with us to help us move forward? >Subject: Re: Imputed income and the IRS > >Our company, Common Ground, is working on this very issue. In short, >there are three Private Letter rulings in existance from the IRS to date >(number 9034048 = Seattle; 9109060 = Santa Cruz (not certain) and 9231062 >= City C (not sure who they are). A private letter ruling is just that >and the name of the party can be hard to get hold of. Any company, Apple >for example, can request a Private Letter ruling from the IRS requesting >that in that company's case, the benefits supplied to an employee's >partner be considered tax-exempt just like for a legal spouse. The >feeling is that if enough companies request Private Letters, then the >IRS will be forced to make a general ruling on this issue. > >Please contact me for more information by return mail or by calling >From: liz winfeld >Subject: Re: tax liabilities > >Hi: > >The fair market value (the equation for which is a little complicated) of >the partner's benefit is considered imputed (taxable ) income to the >employee unless the partner qualifies as the legal spouse (not possible) >or dependent (very difficult) of the employee. The employer's tax >picture is such that many employers offering the benefit are deducting >their portion of the premium as "common and reasonable business expense" >and for the most part are being allowed to do so. However, there is no >official IRS ruling on that...there are only a couple of private letter >rulings which are not precedents. > >There is absolutely no difference in the tax hits to either the employee >or the employer based on the sexual orientation of those receiving (or >issuing!) the benefits.