I had to add my domestic partner and her child to my work provided health insurance covering my child and me. How do I calculate the imputed income on the new premiums?

[jenneyd]

Previous premium was employee and child, new premium is family.

[Opus 17]

The employer is supposed to do that.

Under federal law, the employer is not allowed to provide tax-free health care for your DP unless your DP is also your tax dependent.  Normally this means that healthcare premiums paid by you (employee share) for the DP are after-tax, not pre-tax, and the employer share of premiums is taxable income to you.  The employer should include this on your pay stubs and W-2 automatically.  You just report your W-2 on your tax return as normal.

 However, your employer CAN provide tax-free healthcare to your child.  Assuming that the cost of "family" care is the same for employee+spouse and employee+spouse+child, you may not actually have any imputed income to deal with.  And if there are separate premium bumps for the DP and the child, only the bump from the DP is taxable, not the bump from the child.

You should ask your HR or payroll department for clarification if needed. 

[jenneyd]

My employer is taxing me on the insurance premium of my child, my DP, and DP's child.

[Opus 17]

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@jenneyd wrote:

My employer is taxing me on the insurance premium of my child, my DP, and DP's child.

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Seems ok then.

The benefit to the DP is taxable unless they can be your tax dependent (lived with you all year, income less than $5200).  If the child is not your biological or adopted child, their health care benefit is taxable to you unless they can be your tax dependent.  However, a child who is not related can't be your tax dependent unless their parent is not required to file a tax return (because their income is too low) AND the child lives in your home the entire year AND no other person has a valid claim to the child as a dependent. 

If you adopt the child, their benefit becomes non-taxable (notify your employer).  Likewise if you marry your DP.