To enroll your domestic partner as a dependent, as a new hire, or as a qualifying life event during the year when your domestic partnership is established. 

Affidavit of Domestic Partnership

You may be required to provide satisfactory evidence of your partnership in connection with a plan audit of dependent eligibility, or a claim for benefits under an insured plan. If you choose, you and your partner can provide evidence of your partnership by signing the Microsoft Affidavit of Domestic Partnership before a notary and retaining the affidavit in your records. The affidavit will be effective after the date it is signed.

When you enroll your domestic partner you’ll be asked to declare whether they are taxable or non-taxable. To determine the answer, it's important to understand the Internal Revenue Service (IRS) rules for qualifying dependents. 

Under IRS Section 152, a dependent is defined as either a qualifying child or a qualifying relative. Usually, for a domestic partner or their children to qualify as a dependent relative for purposes of receiving tax-exempt employer-paid health care coverage, they must: 

• Reside with you for the tax year in question AND

• Receive more than half of their financial support from you.

By electing the "non-taxable" you are confirming that your domestic partner and/or their children are qualified dependents for tax-free health benefits under IRS definitions. 

If you elect the "taxable" option, the value of the Microsoft contribution toward the cost of their coverage is a taxable benefit to you. The same is true for the children of your domestic partner unless they meet the eligibility requirements to be considered your qualified dependent for purposes of receiving health care benefits on a tax-free basis. 

Important Note: The IRS rules are complicated; you may want to consult your tax advisor for assistance.

Microsoft HSA contribution amount

If you enroll your domestic partner to the Health Savings Plan, you'll receive the “Employee + 1” Health Savings Account (HSA) contribution from Microsoft. This is because the amount of the Microsoft HSA contribution is tied to the coverage tier (Employee only, Employee + 1, or Employee + 2 or more) for which you enroll, and is not affected by your domestic partner’s status as a qualifying tax dependent.

The maximum amount you can contribute to your HSA in a tax year is also determined by your coverage tier. In calculating the amount you can contribute yourself, remember that the contribution from Microsoft is also counted against the annual IRS maximum.

There is no imputed income on the value of the Microsoft HSA contribution.

Paying for expenses

If you enroll in the Health Savings Plan and cover your domestic partner, you can pay for their medical expenses from your Health Savings Account. However, there may be tax implications if your domestic partner is not a qualifying dependent under IRS definitions.

According to the rules governing tax-free disbursements from a Health Savings Account, qualified medical expenses are those incurred by the following persons:

• You and your spouse (including same-sex spouse, as defined by governing federal law). 

• All dependents you claim on your tax return.

• Any person you could have claimed as a dependent on your return except that:

• The person filed a joint return,

• The person had gross income above the IRS limit, or 

• You, or your spouse if filing jointly, could be claimed as a dependent on someone else's tax return.

If your domestic partner (and/or their children) are not qualifying tax dependents, you may still choose to pay for their out-of-pocket medical expenses from your HSA. However, the amount you take from your HSA to pay medical expenses for a person who is not a qualifying tax dependent is subject to income tax and a 20 percent tax penalty, per IRS regulations.

Important Note: If your domestic partner (and/or their children) are not qualifying tax dependents, you cannot submit their expenses for reimbursement under a Flexible Spending Account (FSA).

If you marry your domestic partner, you’ll need to update their status to ‘spouse’. Any changes to your benefits will need to be made within 90 days of your marriage. See the Enrollment & Eligibility page for more details. 

Quick tip! Legally married same-sex couples will be treated as married for all federal tax purposes regardless of domicile or residence as long as the marriage occurred in a state which legally recognizes same-sex marriage.