WA State Lamaker Proposes Domestic Partner Health Benefit Tax Break

April 9, 2007 (PLANSPONSOR.com) - A Congressional lawmaker from the state of Washington has introduced legislation that would give employer-provided health care for domestic partners the same tax treatment as is currently the case with employee spouse benefits.

According to  a news release from U.S. Representative Jim McDermott (D-Washington), The Tax Equity for Health Plan Beneficiaries Act is aimed at encouraging employers to provide domestic partner benefits to foster the spirit of fairness and equality in the workplace.

“Every American deserves to be treated with dignity, respect and equal treatment under the law, but that is not what is happening in the workplace today, and I intend to right this wrong,” McDermott declared in the statement.

McDermott is chairman of the House Ways and Means Income Security and Family Support Subcommittee.Under current law, an employer’s contribution of the premium for health insurance for an employee’s spouse is excluded from the employee’s taxable income. However, any employer contribution for the domestic partner’s coverage is considered wages and is counted as taxable income under the current tax law.

“This glaring inequity can add thousands of dollars to an employee’s taxable income every year and result in higher federal income taxes, when the only difference is one household includes a married couple and another household includes a domestic partnership- that’s absolutely wrong,” McDermott said in the statement.

McDermott continued: “Even model corporate citizens in Washington State, including Boeing, Microsoft, Starbucks, Nordstrom, Safeco, and Washington Mutual, are forced to treat employee earnings differently under the existing Internal Revenue Code. I want these companies to be recognized for their commitment to equality in the workplace and encourage others to follow their lead.”