Tax Treatment of Same-Sex Civil Union and Domestic Partnership Partner Benefits by State

Author: Alice Gilman

Under federal law and the law of every state that has an income tax, the value of certain benefits offered by an employer to an employee's spouse in a lawful marriage, regardless of gender, and their eligible dependents is not subject to federal income or FICA (Social Security and Medicare) tax withholding. However, the same blanket rule does not apply to those in civil unions and domestic partnerships.

Federal law does not recognize civil unions or domestic partnerships as "marriages," regardless of the partners' gender, and all benefits provided to partners of employees in such relationships are fully taxable and subject to withholding, unless the partner qualifies as the employee's "dependent" for tax purposes. However, some states do provide income tax benefits for partners and dependents of employees in same-sex civil unions or domestic partnerships.

The following chart summarizes state laws regarding the tax treatment of the value of benefits provided by an employer to an employee's same-sex civil union or domestic partnership partner (and their dependents). States that do not have an income tax are indicated on the chart with "N/A."