While health plans are required to provide coverage up to age 26 for dependent children, several states have not adopted the updated Internal Revenue Code in order to make this coverage tax-free. This means that for about a dozen states income imputation for dependent child coverage will be required for state income tax purposes. However, keep in mind that the existing dependent rules of a qualifying child (under age 24 and a full time student) or a qualifying relative (any age but the parent must provide over one-half of the financial support for the child) still apply. Some employers are requesting that employees in the affected states certify that their dependents meet the state's dependent requirements. Certification can certainly apply to many dependent situations, but would not be able to apply to all situations, meaning that imputation would still be required in some states. It is also important to keep in mind that many state legislatures start to meet in January, and some of the nonconforming states could retroactively adopt the updated IRC, thereby removing the need for imputation or certification. However, retroactive adoption is not likely in those states where those efforts have already failed, such as California.
Disclaimer
While we are pleased to have you contact us by telephone, surface mail, electronic mail, or by facsimile transmission, contacting Kilpatrick Townsend & Stockton LLP or any of its attorneys does not create an attorney-client relationship. The formation of an attorney-client relationship requires consideration of multiple factors, including possible conflicts of interest. An attorney-client relationship is formed only when both you and the Firm have agreed to proceed with a defined engagement.
DO NOT CONVEY TO US ANY INFORMATION YOU REGARD AS CONFIDENTIAL UNTIL A FORMAL CLIENT-ATTORNEY RELATIONSHIP HAS BEEN ESTABLISHED.
If you do convey information, you recognize that we may review and disclose the information, and you agree that even if you regard the information as highly confidential and even if it is transmitted in a good faith effort to retain us, such a review does not preclude us from representing another client directly adverse to you, even in a matter where that information could be used against you.
