The Issue:
Under federal law, legally married employees do not pay taxes on their employers' contribution for health insurance benefits, but lesbian and gay employees do. Those who cannot afford the extra taxes are often forced to do without health coverage for their loved ones. In addition, because employers must pay payroll taxes on their employees’ taxable incomes, employers who provide these benefits are taxed at a higher rate as well.
Current federal law taxes contributions to a domestic partner's health insurance premium as part of the employee's income. Thus, if you make $40,000 a year and your partner's insurance is valued at $200 a month, you will be taxed on $42,400 at the end of the year. A married person covering his or her spouse in the same situation would be taxed only on the salary of $40,000.
NGLCC and the Issue:
The National Gay & Lesbian Chamber of Commerce is working to equalize federal tax treatment of health benefits for domestic partners. The NGLCC is advocating that the federal government end the unfair taxation of health benefits provided by employers to any beneficiaries covered under an employee's benefits plan, including domestic partners. We are working with champions in Congress, the private sector and other LGBT organizations to build support for this legislation.
Members of Congress should support legislation that would equalize federal tax treatment of health benefits for domestic partners.
