Health insurance premium

[GGG77]

My fiancé is a domestic partner and qualifying dependent. Their health insurance benefit from my employer was taxable income on my W2. How do I deduct it or get a credit for it when filing since they are a dependent? 

[MinhT1]

You can deduct the premiums paid for your domestic partner as Medical expenses on Schedule A - Itemized deductions.

For tax year 2021, Medical Expenses are subject to the 7.5% rule and you can only claim the excess over 7.5% of your Adjusted Gross Income.

Please note that Itemized Deductions will only "help" when they exceed your standard deduction.

For 2021, standard deductions are:

For a taxpayer under 65, not claimed as a dependent

• $12,550 for Single
• $25.100 for Married Filing Jointly, or Qualifying Widow(er) with dependent child
• $18,800 for Head of Ho0sehold
• $12,550 for Married Filing Separately
• If you are over 65 or blind, add $1,350 for each instance if married or add $1,700 each instance if single or head of household

You can enter Medical expenses by following these steps:

1. In TurboTax, open your tax return
2. Click on Federal in the left-hand column, then on Deductions & Credits on top of the screen
3. Scroll down to locate the section Medical and click on Show more
4. Click Start next to Medical Expenses.

[Opus 17]

You can only deduct the portion you paid taxes on—your after-tax payroll deductions for your partner's insurance, and the imputed income.  You can't deduct the portion of the premiums that were deducted pre-tax for yourself.

Your employer did not need to assess imputed income if your partner is able to be claimed as your dependent. However, now that they have done so, it may be impossible to change it for 2021.  I don't know if it would be allowable, and if it was allowable, it would require a corrected W-2 and a big change in the employer's tax filing.  They may have had a deadline by which you were supposed to certify your partner as a dependent, and if you missed the deadline, you may be unable to make changes now.  But you should at least ask.

Likewise, your employer is not required to assess imputed income for 2022 if you can certify your partner will be your dependent (and if you have not missed any deadlines).  If you think your partner will not be working in 2022 and you will be able to claim them as a dependent, you should ask your employer if you can take the imputed income off your payroll.