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Changes to Domestic Partner Definition in California

December 30, 2019

In July 2019, Governor Newsom signed SB 30 which expands the definition of domestic partnerships in California. This change in the law does potentially impact employee benefit plans and how eligibility is defined and administered.

The Past

Under prior California law, Registered Domestic Partners (RDP) are deemed to have the same rights and responsibilities as legally married spouses. Existing law defines domestic partners as two adults who have chosen to share one another’s lives in an intimate and committed relationship of mutual caring. A domestic partnership is formed when persons file a Declaration of Domestic Partnership with the Secretary of State and, at the time of filing:

  • Neither person was married or in a domestic partnership with someone else;
  • The persons are not related by blood;
  • Both are at least 18 years of age (with exceptions);
  • Both are capable of consenting to the domestic partnership;
  • Both are members of the same sex or one or both is eligible for social security benefits and over the age of 62.

It is this last bullet point in the list of requirements that has been changed in the new law. 

New Law

In July 2019, Governor Newsom signed SB 30 which eliminates the requirement that persons be of the same sex or of the opposite sex and over 62 years of age. Effectively, the law simply did a strikethrough on the last bullet point:

  • Both are members of the same sex or one or both is eligible for social security benefits and over the age of 62.

The new law is effective January 1, 2020. The registration process consists of completing a Declaration of Domestic Partnership Form, having the form notarized, and mailing the form (along with a small processing fee) to the Secretary of State.

Impact on Employers

Employers should evaluate how this change in RDP definition may impact the eligibility provisions of their benefit plans. Specifically, they should determine whether they wish to make any changes to welfare plan eligibility requirements for unregistered domestic partners in the absence of the prior law’s restrictions. 

A Reminder about RDP/DP Documentation

Employers must treat Registered Domestic Partners exactly as they do spouses. In practice, this means that Domestic Partnership Registration documentation may not be requested unless marriage documentation is also required for married individuals. On the other hand, validating documentation (such as an Affidavit of Domestic Partnership) may still be required for unregistered domestic partners covered on benefit plans. Importantly, Vita highly recommends the use of an Affidavit of Domestic Partner for all unregistered domestic partners on group sponsored benefit plans.

Don’t Forget about Imputed Income

As a reminder, the value of health benefits coverage provided to domestic partners must be imputed to the employee’s income. The following chart outlines the federal and state taxation consequences for health benefits provided under employer health benefit plans. It is important to make sure that correct benefits taxation protocols are coordinated with payroll. 

 

Spouse
(Opposite Sex and Same Sex)

Registered Domestic Partner

Unregistered Domestic Partner

Federal Income Taxes

Exempt
(No Imputed Income)

Not Exempt
(Must Impute Income)

Not Exempt
(Must Impute Income)

California Income Taxes

Exempt
(No Imputed Income)

Exempt
(No Imputed Income)

Not Exempt
(Must Impute Income)

 

Questions

Please reach out to your Vita Account Team with any questions about this change, to discuss your current documentation procedures, to understand the value of using DP Affidavits for unregistered domestic partners, or to confirm imputed income taxation on processes. 

2020-Compliance-Calendar

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