Queer Health: Tax Day Edition!


This post is going to look specifically at tax issues in the United States, although similar issues may exist in some other countries. I apologize to those outside of the USA, and promise to post less USA-centric queer health posts in the future.

Did you know that domestic partnership benefits are taxed as income? While married opposite sex couples in every state in the USA are not taxed on employer-offered health insurance, the same is not true for unmarried couples, or married same sex couples.

I was thrilled when the company I used to work for started offering health insurance that could my partner. She could not access my life, vision, or dental insurance, but health insurance is the most important benefit most people get in their workplace, and it was a relief to finally have the ability to cover her. We signed up on the first day my workplace offered this benefit. What I had not expected was the amount this coverage would cost me. While I did not have to pay taxes on my own health insurance benefit, the cost of my partner's insurance WOULD be taxed. Because we were not married, this benefit was considered income for both my state and federal income taxes. I kept the coverage, but paid a larger portion of my paychecks in taxes to do so.  My employer also had to pay a larger tax amount on my income, since both employees and employers pay taxes on employee incomes.

According to Unequal Taxes on Equal Benefits, a paper from The Center for American Progress, employees with unmarried partners covered by their health insurance paid an average of $1069 in taxes in 2007 (I couldn't find more recent numbers). Even in states with legal same-sex marriage the federal government does not recognize those marriages, and so this insurance coverage may be taxed as income on federal taxes.

It is unclear how many families choose not to take a domestic partnership benefit due to this cost, increasing the barrier to healthcare for LGBT Americans.  What is clear is that those who do have access to this benefit and take it are paying more money to access the same level of healthcare as their heterosexual married co-workers.

For further information on federal laws related to domestic partner benefits and unmarried couples, ;the HRC has a breakdown.

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