Domestic partner benefits are sometimes included in employee retirement plans. These benefit plans offer unmarried couples similar or equal benefits to those given to spouses. More public and private sector employees are offering such plans for unmarried partners, and some jurisdictions require domestic partner coverage as a condition of gaining a government contract. Although these retirement benefits are common, rules aren’t uniform. Below is a brief discussion of issues related to these benefits.
Domestic Partners: Who Are They?
Domestic partners are unmarried, unrelated adults sharing a household. To qualify for retirement benefits under a domestic partner plan, employees may need to prove that their partner meets employer-determined criteria. Many benefit plans define eligible partners as those who are:
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18 years of age and over
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Not more closely related than is permissible for a marriage under jurisdictional law
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In an exclusive relationship with the covered person
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Sharing finances with the other person
Some plans limit same-sex partner participation, and others limit the offer to those in committed relationships. Certain jurisdictions allow partners to register the relationship; while registration doesn’t convey the same status as a legal marriage, it can facilitate participation in retirement plans. Retirement Planning Attorneys Orange County NY can tell clients more about the state’s laws on domestic partnerships as they pertain to employee benefits.
Tax Liabilities
Federal tax laws don’t treat benefits for domestic partners the same as spousal benefits. In most cases, a person whose partner receives these benefits must include their cost as part of their taxable income. Employees must pay taxes on premiums paid, and they must include the employer’s contribution in taxable income as well. Exceptions exist for legally dependent partners who share a household and receive more than half of their support from the covered worker.
Getting Help With Domestic Partners’ Benefit Issues
Thousands of companies include domestic partner coverage in benefit plans, and as they become more common, rights and responsibilities will change. Retirement Planning Attorneys Orange County NY such as Mark Aberasturi can advise clients on domestic partner benefit plans and they can protect the client’s rights should a dispute arise.
