Can I claim my imputed income on my dependent domestic partner

[L_I_P]

Me and my gf are registered as DP in nevada, so that I can add her onto my work insurance/benefits. I see on my pay stub I get DP taxes/imputed income taken out. However, I am able to claim my DP as a dependent under the "qualify realtive" qualifications. So does that mean, I should be able to claim back the taxes I paid toward imputed income? 

[Vanessa A]

Possibly.  If you have had DP Imputed taxes withheld and your GF qualifies as a Qualifying Relative for tax purposes, her benefits then are no longer considered taxable non monetary income.

How the benefits are reported on your W-2 will make a difference in how easy it is to get a refund, although you won't necessarily get a full refund for the amount withheld.  Basically, the imputed benefits increased your taxable income.  So the amount withheld is still based on your overall income from that employer.  The difference will come in if they included the cost of her benefits in box 1 of your W2 which they probably did since this is counted as taxable income.  

In order to get a refund or have that amount not taxed, you would need to talk to your employer and have them issue you a corrected W-2 removing the benefits from your taxable income, which they may or may not be willing to do.  This is something that is your responsibility to inform them of when you add them to your insurance or when their eligibility as a qualifying relative changes.  If you will be claiming her as a Qualifying Relative again in 2024, you should let your employer know.

Employers are allowed to rely on the employees certification that the DP does qualify as a Qualifying Relative.  Be sure if you do have them stop taking taxes out on the benefits, that if anything changes, you have them take them out again since this would then become taxable income that if audited, you would end up needing to pay taxes on as well as interest and penalties. 

To claim someone as a Qualifying Relative, they must be:

• Your child ( including step children, adoptive children and foster children) or a descendent of them
• Your sibling (including half siblings) or a child of your sibling or a sibling-in-law
• Your parent or grandparents, including step parents and in laws
• Any other person that lived with you for the entire tax year
• Not a qualifying child of another taxpayer
• Someone that you provided over half of their support for during the tax year
• They have income of less than $4,700 for the year.

[L_I_P]

Thank you for the response, I contacted my HR and they told me "The DP portion of premium is not tax sheltered." Is that correct? 

[L_I_P]

Update from HR: talked with payroll and the post-tax deductions for the DP portion is reported in box 1 as taxable income.

[Vanessa A · Accepted solution]

Correct.  The DP portion should be reflected on your W-2 as box 1 taxable income when you can NOT claim the DP as a dependent.  However, if you are claiming the person as a dependent on your return, then you can notify them that this person qualifies as a dependent and do not need to include it as box 1 wages.  The benefits are taxable when your DP does NOT qualify as a dependent.