[LCC] Domestic Partner Benefits and Imputed Income

[Ralph Hexter]

Dear Jorge,

thanks for writing and letting folks know about this. (And good to hear 
from you!) I'm surprised Carleton only figured this out now. I've been 
in this situation for years, and whether you regard it as good or bad, 
previous universities and my current employer, Hampshire College, have 
understood this from the beginning. In some states, it is even more 
complex, if that is possible, because such subsidies for a domestic 
partner -- or in our case in Massachusetts, a legal married spouse -- 
are not imputed as additional taxable income for state purposes but are 
for federal. I have never heard of an institution considering whether it 
should adjust payment to cover this -- and I should point out you'd be 
caught in an infinite regress, because that additional pay would be 
taxed, leading you to need more additional income, etc. etc. etc. 
Moreover -- forgive me if I sound like a college president -- wouldn't 
you then also want the college to consider what other injustices the tax 
code wreaks on somebody, whether single or married, or with many 
dependents or no dependents, and there could be no end to the discussions.

One college president (let him remain anonymous) once said to me he 
thought his college should simply defy this directive, but I bet his 
CFO, college counsel, and/or board would hold him back if he ever 
actually proposed it.

In my view, the only way to fix this is to get same-sex marriage at the 
national level OR establish that tax and other legal benefits for 
couples in marriage-equivalent relationships (marriage in some states, 
civil unions in others, domestic partnerships in yet anothers) must not 
vary from benefits for married couples. There is an interesting suit 
against the so-called 'Defense of Marriage Act' brought by several 
Massachusetts couples that has just been filed. We'll see where that 
goes, but if it gets anywhere, it will only be for legally married couples.

Ralph Hexter

Office of the President
Hampshire College
893 West St.
Amherst MA 01002

413/559-5521

Jorge J. Bravo III wrote:
> Dear Friends and Colleagues:
>
> I am writing to get a sampling of how various institutions around the 
> country are handling the issue of imputed income on domestic partner 
> health benefits.  For those of you who may not know about this, the 
> IRS requires that the value of the portion of health care coverage 
> that an employer pays toward an employee's domestic partner be 
> considered additional taxable income and subject to withholding, since 
> a domestic partner is not a legal spouse.  I found the following short 
> article from the HRC 
> (http://www.hrc.org/issues/marriage/domestic_partners/4820.htm) 
> helpful in learning about the matter.
>
> This is an issue that only recently came to my attention because my 
> own institution, from the time I was hired up until the beginning of 
> the year, had not been making this calculation or withholding an extra 
> amount from my paycheck.  It must have come to their attention that 
> they were supposed to be doing this, and so they started doing this 
> with my January paycheck.
>
> It seems to me that this was an opportunity for the college to 
> consider whether, as a matter of equality, it should attempt to 
> redress this unfairness imposed by the tax code by adjusting the gross 
> pay of employees with domestic partners to cover the extra amount 
> taken out in taxes; but the college did not have any discussion about 
> this, so far as I know.  So I have the following questions:  How is 
> this issue being handled at your colleges and universities around the 
> country?  Are there any institutions that do make the effort to 
> correct this tax inequality by adjusting gross pay for employees 
> relying on domestic partner benefits for health care?  Has this issue 
> been raised, even unsuccessfully, at other institutions?
>
>
> Regards,
> Jorge
>
>
> Jorge J. Bravo III
> Visiting Assistant Professor
>
> Department of Classical Languages
> Carleton College
> One North College St.
> Northfield, MN 55057
> USA
>
> (507) 222-5136
> Email: jbravo at carleton.edu
>
>
>
>
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