Federal Tax Dependents
Faculty & Admin Professional
Note: This is a summary of federal tax regulations and should not be considered as tax advice. This is a complex area of the law. You are strongly encouraged to consult a tax advisor to determine the status of your dependent(s).
Dependents Eligible for University Benefits
You may enroll eligible individuals in certain University benefits plans as outlined in this SPD. Although individuals may be eligible to participate in a University plan as a “dependent” they may not meet the definition of a “qualified” dependent for federal income tax purposes (see Federal Tax Dependent (Qualified vs. Nonqualified) section).
If your dependent(s) meets the IRS test as a federal tax dependent he/she is considered a “qualified” dependent. If your dependent(s) does not meet the IRS test, he/she is considered a “nonqualified” dependent.
There are tax consequences (imputed income) associated with providing coverage to individuals (domestic partners and children of domestic partners) not meeting the criteria of Section 152 of the Internal Revenue Code which defines a federal tax dependent.
Eligible Dependent Test
Examples of non-qualified federal tax dependents may be domestic partners and child(ren) of domestic partners and those dependents not defined under the Patient Protection and Affordable Care Act (“PPACA”). You are strongly encouraged to consult a tax advisor to determine the status of your dependent(s), as this is a complex area of the law. When enrolling your eligible individuals you must first determine if they meet the eligibility criteria for CSU plans.
Eligible individuals include only the following:
- Your spouse or common-law spouse (note 1) (“qualified” federal tax dependent).
- Your same or opposite gender domestic partner (note 2) (may or may not be your “qualified” federal tax dependent).
- You, your spouse’s, common-law spouse’s or your domestic partners unmarried or married child(ren) including natural children, legally adopted children, foster children placed with you for adoption, stepchildren, children in which legal guardianship has been designated and children defined under a Qualified Medical Child Support Order (QMCSO) (note 4) (may or may not be your “qualified” federal tax dependent).
Each child must be either a:
- Eligible individual defined by the Patient Protection and Affordable Care Act (“PPACA”) which allows medical
coverage through the end of the month in which the child attains the age of 26; or until the end of the month in
which the child attains the age of 26 for the insured vision Plan underwritten by VSP; or until the end of the
month in which the child attains the age of 26 for the voluntary group term life child coverage and
voluntary AD&D coverage underwritten by The Hartford; or the end of the month in which the child attains the
age of 26 for dental plan coverage regardless of tax dependency status.
- Eligible individuals of any age who is dependent on you because of a permanent physical or mental disability to the end of the month in which they turn age 26 (note 3). Once the disabled dependent reaches age 26, the University requires the dependent to be certified as disabled prior to age 23, a “qualified” federal tax dependent and currently enrolled in the plan to maintain coverage.
- Children whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 gain eligibility to enroll in the University’s group health plan. Individuals may request enrollment for such children for 30 days beginning October 19-November 19, 2010 for an effective date of January 1, 2011.
- You must complete an Affidavit of Common Law Marriage to enroll your common law spouse. Employees who reside in a State other than Colorado must complete the appropriate affidavit available in the State in which they reside.
- You must complete an Affidavit of Domestic Partnership to enroll your same or opposite gender domestic partner.
- Must be certified by a physician and approved by the appropriate Plan. Please refer to the appropriate Certificate of Insurance for instructions or contact the CSU Benefits Office at (970) 491-MyHR (6947).
- If the subscriber, subscriber’s spouse or domestic partner subject to a Qualified Medical Child Support Order (QMCSO) for an eligible dependent of the subscriber’s spouse or domestic partner, the child is eligible for benefits, whether the child lives with the subscriber, subscriber’s spouse or domestic partner.
Note: No spouse, domestic partner or child can be covered as an eligible individual on a plan if covered as an employee on this plan
or a state classified plan.
Federal Tax Dependent (Qualified vs. Nonqualified)
When you have confirmed your same or opposite gender domestic partner and your domestic partner’s unmarried or married child(ren) eligibility and are ready to enroll them in a University plan, you must indicate whether each individual qualifies as your federal tax dependent. If you fail to do so, they will be identified as nonfederal tax dependents (“nonqualified”).
Note: Medical, dental or vision (pre-tax) enrollment of your eligible domestic partner and any domestic partner child(ren) who are not also your “qualified” dependents for federal income tax purposes, will result in tax consequences (imputed income).
Consult with your personal tax advisor prior to making your determination.