MMC Benefits Handbook
Under current tax laws, the total cost (Company's cost plus your contributions) for providing healthcare coverage to domestic partners results in "imputed income" to you; you must pay tax on this income. The full cost of domestic partner coverage (Company's cost plus your contributions) is subject to federal, income, FICA (Social Security and Medicare) and, if applicable, state and local income taxes.
Your amount of imputed income equals the full cost to cover your partner (and/or your partner's child(ren)). The dollar amount of imputed income is calculated every payroll cycle and is reflected on your payslip and is subject to tax withholding under federal and, if applicable, state and local law. It is also reported on your year-end W-2 Form as a component of taxable income from the Company.
If your domestic partner (or his or her child(ren)) qualifies as a dependent under Internal Revenue Code Section 152 and IRS Publication 501 (that is, are your tax dependents), the cost of their coverage would not be imputed as taxable income to you. You may want to review your W-4 withholding allowance and make changes if applicable.
You may want to review your bank and financial institution information to see if you need to make a change.