Domestic Partner Benefits No Longer Treated as Income in Healthcare Bill

Sunday, November 8, 2009


If you’re gay or lesbian, one of the significant aspects of the sweeping healthcare reform bill passed last night by the Democratic Congress is the change to the way domestic partner benefits are treated by the IRS.

Under current law, domestic partner benefits are treated as taxable income — a blatantly homophobic and discriminatory practice that exposes employees and the employer to higher tax liability.

Gay or lesbian employees with domestic partner benefits, on average paid $1,100 more in taxes than their straight coworker. Under the healthcare reform bill, such benefits are tax-free.

From personal experience regarding domestic partner benefits, I can report that adding Jim to my health plan, or Jim adding me to his health plan, exposes the other to roughly $5,000 a year in additional taxable income. Because of this, neither of us have added the other to our employer sponsored health plan. Over the years, I have written more than a dozen complaint letters to my Congressional representatives regarding this discriminatory practice.

In the words of Congressman Jim McDermott (D-WA):

“[The change] would correct a longstanding injustice, end a blatant inequity in the tax code and help make healthcare covergae more affordable for more Americans.”

I couldn’t agree more.

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16 Responses to Domestic Partner Benefits No Longer Treated as Income in Healthcare Bill

  1. Aunt Peg says:

    Wow, Christopher, I had no idea domestic partner benefits are taxed as income?

    As usual, you’re correct. This is discrimination!

    The rightwingers and the Bible thumpers don’t want to let you marry and then they kick you again by taxing the health benefits you provide for your spouse? Outrageous.

  2. Tiny Dancer says:

    Aunt Peg. When Kiel lost his job and I added him to my benefits, my income tax went up more than $4,000 a year. I almost cried when I read this is about to change. No wonder the Republicans are opposed to healthcare reform. They enjoys kicking gay Americans every chance they get.

  3. Harry says:

    This is truly extraordinary news. I hadn’t heard this detail of the healthcare plan. Very, very good.

  4. lea-lea says:

    Huge! Huge! This is huge!

    I knew about this appalling inequity and it always pissed me off royaly. It’s well past time to end the taxation on domestic partner benefits for gay couples.

    Too bad the Fed can’t refund the taxes already paid on these benefits.

  5. Oh, blah blah blah. Everyone knows that gays, not poor, overtaxed CEOs and bankers, are the real moneybags in the US.

  6. TAO says:

    I never realized that domestic partner benefits were taxed as INCOME!

    I read this and immediately called my employees who cover their partners on our company insurance: Of course when they get the message they are going to wonder what ‘the crazy old man’ wants on a Sunday morning…

    THAT is so wrong and I will have no part in it…

    Now I gotta get with my CPA and figure out how to fix this…

    Never understood what is so incomprehensiable about the concept, “…do unto others as you would have them do unto you….”

  7. TOM339 says:

    For gay and lesbian Americans, equality, isn’t really equality but a luxury to be taxed thanks to idiot lawmakers who creatively find ways to shaft a group of hardworking, Americans who just want a place at the table with everyone else.

    Thanks for keeping us informed and educated.

  8. Big Hank says:

    All IRS rules are the result of the Congress.

    I would be very interested in seeing the list of Congresspersons who wrote and approved tax laws to penalize gay and lesbian workers who tried to add their partner, only to be smacked by income tax liability.

  9. Fran says:

    That was news to me too.

    But as much as I am celebrating this House of Reps win, the realist in me cringes to see what the Senate will do to this bill.
    I fear it will be sliced and diced beyond recognition.

    The house garnered one brave republican vote…

    Rep. Joe Cao (R-Louisiana) was the only Republican who voted in favor of the bill.
    He was quoted as saying:
    “I have always said that I would put aside partisan wrangling to do the business of the people. My vote tonight was based on my priority of doing what is best for my constituents,” he said in a statement quickly released by his office.

    But the bad news– Earlier in the evening, he also supported a controversial amendment (which also passed) from (alleged) Democratic Rep. Bart Stupak prohibiting any federal money from funding abortion.

    Will the Senate muster one Republican who would essentially override turncoat Lieberman’s vote- he’s already announced he is in the kill the bill camp.

    A lot more Senators have their campaign coffers overflowing with Wealthcare lobby money- so their vote has already been bought & paid for.

    To be continued…..

    but kudos to the lone republican in the House who had some spine to do the right thing.

  10. Brigadoon says:

    Lieberman is screeching about the filibuster. If he kills healthcare reform, it’s incumbent on Harry Reid to remove Lieberman from his chairman role in Homeland Security. There must be consequences for selling the American people down the river. If Reid won’t act, then he goes too.

  11. J says:

    For what it’s worth, the “imputed income” from domestic partner benefits applies to unmarried heterosexual couples as well (I pay extra taxes so my girlfriend can have health insurance). In that respect the original imposition of this grossly unfair tax was probably not targeted at gay couples, but perhaps a broader segment of people “living in sin.” The difference, of course, is that we are fortunate enough to be able to get married if we wanted to, as is sadly not yet the case for gay couples. I fervently hope that this is a step towards the equal treatment of all domestic partners.

  12. i didnt know this – thanks for letting us know
    again – just another way for the republicans to let everyone know how much they hate gays and everyone who isnt them

  13. libhomo says:

    Reid doesn’t need Lieberbush. He can push through healthcare during budget reconciliation, which only requires a simple majority.

  14. VicoDANIEL says:

    Of course, straight couples can legally marry and in a single legal motion, 1,300 Federal rights and benefits instantly convey.

    Gay couples, despite being able to marry in 5 states, still have no access to those 1,300 Federal rights and benefits.

    So I don’t have much sympathy for straight domestic partners who got dinged with the silly benefits as income rule that gay couples have dealt with for years.

    If you’re straight, get married and take advantage of the rights society provides. We don’t have that option.

  15. Chris says:

    I didn’t realize this was in the House bill, hope it survives the Senate. The quote is just one more reason why Seattle loves Jim and keeps sending him to the Hill with 90+% support in his district.

  16. HalfGay says:

    This is a good thing … In California I pay income tax on my boyfriend’s healthcare under the domestic partnership law (we are not all that big on marriage). It’s a lot of money. But, this healthcare reform bill takes out all money for abortions if the government sponsors the plan at all – this is bad because it is so unnecessary. A woman could not pay for it on her own if she wanted to. This bill is a good start but not the right one yet.

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