My partner and I are both working, currently covered by each individual's company health insurance. My income is higher, but her health insurance is slightly better (lower deductibles and out of pocket max), so ideally I will claim the child as a dependent while she will have him under her insurance plan. Question 1: is this scenario perfectly fine, or are the tax implications that we need to be aware of? Question 2: let's now suppose that I will also join her health insurance's family plan (we do qualify as domestic partners) and decline my company's health insurance. Is this also fine, or are there tax implications to be aware of?
I'm asking this because I read in her insurance memo that any health benefit that I may receive through her plan as domestic partner would be subject to income tax. Is this true? And if so, I'm now wondering whether the same logic applies to the child (for example, a situation where for any health benefit that the child receives through his mother's health insurance, I will need to pay income taxes because he's my dependent). I hope that's not the case! Thank you
