When you enroll your domestic partner or your partner's child in one of the City of Scottsdale's sponsored medical plans, the IRS considers the City's contribution toward the additional coverage as your imputed income. Your imputed income is the City's contribution toward the additional coverage for your domestic partner and/or your partner's child.
The payroll deduction amount to cover your domestic partner and/or your partner's child is a post tax deduction - unlike medical coverage for other enrolled family members.
- Example A:
If you enroll your domestic partner and his or her child, your imputed income would be the difference between the City's contribution for employee only coverage (for you) and family coverage. If you are a Cigna OAP plan member, your monthly-imputed income would be $1,121.00.
- Example B:
If you enroll your domestic partner, your imputed income would be the difference between the City's contribution for employee and spouse coverage and employee only coverage. If you are an Cigna OAP In-Network member, your monthly imputed income would be $652.00.
Imputed income is separate from - and in addition to - your monthly plan cost. Imputed income applies even if you pay no monthly cost for your medical plan. The amount of your imputed income depends upon the plan in which you are enrolled and the level of your coverage.
Imputed income is taxable - that is, it increases your taxable gross income for federal and state income taxes as well as for FICA (Social Security and Medicare) and taxes are withheld from your paycheck. Your imputed income is reported on your annual Form W-2.
Imputed income does not affect calculations for City-sponsored life or dependent life insurance, and/or retirement or disability income.
Based on IRS requirements, imputed income applies only for coverage of an individual who is not your tax dependent. If your same-sex domestic partner (or your partner's child) qualifies as your tax dependent under Section 152 of the Internal Revenue Code, you should have no imputed income. To do this, the domestic partner and partner's children must: a) receive over 50% of his or her support from you for the year; and, b) have as his or her principal abode your home for the entire year, and be a member of your household.