Under the current tax code, employer-provided health care benefits for employees, their spouses and dependent children are exempt from federal income and payroll taxes; however, health care benefits provided to unmarried domestic partners are subject to both payroll tax (for the employee) and to income tax (for the domestic partner beneficiary). But if passed, the proposed Tax Equity for Health Plan Beneficiaries Act introduced last month in Congress would end the taxation of health care benefits of both same- and opposite-sex domestic partners.
The Act was introduced in the House of Representatives by Rep. Jim McDermott (D-Wash.) and in the Senate by Sen. Charles Schumer (D-N.Y.) A similar bill was introduced last year, but failed to gain enough traction to make it out of committee. The bill might have more potential this time around, with a friendlier climate in both Congress and the White House.
To learn more about the tax laws the Act may impact, check out this article on the taxation of domestic partner benefits from the Human Rights Campaign. The Stoel Rives World of Employment will pay attention to this and other important Labor and Employment legislation, so check back for updates!