Wed 24 May 2006
That Rant I’ve Been Promising You, Or Being Taxed for Being Gay
Posted by Liza under Personal, Current Affairs, Opinion
This rant isn’t quite as detailed as I intended it to be. Everyone in the Payroll Department is at some giant PayrollCon this week, except one very nice woman who explained to me that she could help me with "payroll" but not with "benefits."
Since what I want is someone to walk me through all the deductions on my check stub, and to tell me how they’ll change — and what my bottom line will be when I go back from 80% to regular full-time work — I thought she would be able to help me.
No, sadly.
The payroll people deal only with the tax bits. She would be happy to explain to me how imputed income works, but she can’t tell me why the amount of imputed income showing up on my current check is +4X what it was before I went out on FMLA leave.
I already know how imputed income works. It’s a fine notion, that companies have to count certain benefits as if they were income paid to their employees. That way you can’t sneakily give your executives houses and cars and housekeepers and tell your shareholders that they only earn a pittance.
Sometimes, it’s a problem. The amount of money my employer pays for Jill’s health insurance is taxed as income to me. If we could get legally married, they would stop taxing that as income to me. So my income is "X," but my taxable income is Y, which = "X+employer contribution to Jill’s health insurance." Incidently, the difference between X and Y is LARGE.
I think — although I need to talk to the benefits person (who works in another time zone) to make sure — I think that number is approximately $11,000 this year. But it is theoretically possible that part of that number has something to do with my having been on FMLA leave. I have to pay some of the benefit costs back, but maybe some of them are accounted for as imputed income.
If my math is right, and the FMLA isn’t making the numbers completely insane, a straight married person making my exact income would pay less in all federal and state taxes than I pay, because that person’s taxable income would be $11,000 less than mine.
Why I’m confused is because last year the difference between X and Y was much smaller, more like $3000. That’s still unfair, but a lot less dramatic.
Also theoretically, Congress could fix this problem. Here’s more information about the bill that would do that, from HRC.
BTW, I guest blogged this evening over at Accident of Hope, while Trista is on vacation. I tell an embarassing story about myself, so if you don’t want to read one of those, stay here. Otherwise, you should know that Trista is a very interesting blogger, with an adorable little girl named Julia. If you haven’t yet, go visit.





May 25th, 2006 at 7:37 am
i hope you get it figured out and it turns out to be a mistake. if they are really imputing $11,000 of income to you, depending on your tax bracket it might have been cheaper just to buy jill separate insurance!
i suppose i don’t have any right to complain, but at least your company pays domestic partner benefits at all. we don’t even have the option to get screwed on our taxes like that.
May 25th, 2006 at 7:46 am
oh, i just read your guest blog. for some reason trista’s blog won’t let me comment. i just wanted to say EWWW! picking your nose in public is disgusting and you were rightly mocked for doing it. do you know how many germs you are spreading?! eww.
and this is from a girl who only washes her hair about once a week and wears dirty clothes until they don’t pass the sniff test, and then airs them out and wears them some more. but, eww!
May 25th, 2006 at 9:44 am
It is 100% true that I am lucky for the fact that my company offers domestic partner benefits.
Aside from the logistical problem of finding someone who can really explain things to me, I hope readers don’t think I’m upset with my company about this. Yay to them!
They actually get screwed by this too, because their share of payroll taxes are higher for me than my married counterpart. They have to pay them on the “total” income.
All these numbers would be less dramatic if I didn’t pick the “cadillac” health insurance option available. But with trying to get pregnant and then having a baby, IMO, you want the most flexible coverage you can afford. Still, we will be exploring all of our options next year.
If the insurance at Jill’s work covers our preferred providers, we’ll move her coverage and Noah’s (assuming the adoption is complete by then) totally over to her company’s benefits, and I’ll scale back to a lower-cost option here.
May 25th, 2006 at 11:48 am
Liza, you might want to check that they haven’t added Noah as Jill’s dependent (and another taxable imouted income issue). My company did that in error for both my kids for a couple of months before I caught it (I had just changed my annual elections, which is why I didn’t notice at first the paycheck difference). You’re right, part of it might be the FMLA leave insurance benefits or whatever. Good luck! That is some premium insurance you have if it is priced that high. I have the absolute best coverage at my company, no office co-pays, only $5.00 pharm co-pays and J is only about $225 for each pay period, 26 pay periods in the year.
Good luck!
May 25th, 2006 at 12:04 pm
That is good coverage, Kat. But wouldn’t it be strange if YOUR employer provided bad coverage?
Thanks for the heads-up on how they might have added Noah. I left a message for West Coast Benefits Guy, so hopefully all of this will get clarified soon.
May 25th, 2006 at 4:30 pm
OK, speaking as a payroll person, please don’t confuse us with benefits. We don’t know, we don’t want to know, we just deduct what they (benefits) tell us and calculate the imputed income arising from benefits as they tell us as well… lalalala (hands over ears).
I think Kat is probably right on track for how the figures got so out of whack. Hope you’re able to contact west coast guy soon.