[November 22, 2005]

Beginning in January, faculty and staff will need to notify the University if they have UC health plan coverage for natural or adopted children who do not qualify as tax dependents under IRS rules.

IRS rules require UC to report as taxable income (“imputed income”) the UC employer contributions for health plan coverage for dependents who do not qualify under IRS requirements (IRC §152) as tax dependents.

Following the passage of the Working Families Tax Relief Act (WFTRA), which changed the tax dependency requirements in IRC §152, employees will need to “self-identify” natural and adopted children who do not meet the new IRC §152 requirements for purposes of imputing income.

For more information on the new tax rules, see the article in the November HR/Benefits Briefing.

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