Same-Sex Marriage Update

[MsTinkerbelly]

The cost of marriage discrimination? A $3,500 pay cut!
The comments lately are abuzz with people talking about the tax penalty on their same-sex partner’s health insurance. A few months back I calculated the exact impact for my partner and me — and I work at a company with full domestic partner benefits. This is what I wrote about it. You’ll also find links to help you calculate your own penalty, too.

by Rob Tisinai

I investigated how much it would cost to add a domestic partner to my heath plan. If I were a straight man adding a wife, I could find the answer right in my employee handbook: $729.04 a year. And of course I wouldn’t have to pay taxes on that money, which eases the pain.

But a domestic partnership is more complex, because the law says I do have to pay federal income tax on it — and by “it” I don’t just mean my own contribution. The feds tax me on my employer’s contribution, too: $5876.52 a year. This appears on my W-2 as “imputed income.”

Add it up, and being gay means my taxable income would be $6605.56 greater than if I were straight. So, at my marginal tax rate, my federal taxes would be higher by $1849.56.

But there’s more. That’s $1849.56 in take-home pay. What kind of salary cut does that represent? Don’t forget, take-home pay is only a fraction of your actual salary. My employers sent me to this site for calculating that sort of thing. It turns out a take-home hit like that is equivalent to a $3500 salary cut.

That’s right. Adding a spouse to my health plan is like getting $3500 pay cut, compared to what would happen if I were straight.

And this is at a company with full domestic partner benefits.