Taxes and your benefits

• Your TIP amount will adjust or stop automatically if you change or cancel your medical plan during your first 31 days of employment or during Open Enrollment. Also, certain changes in your coverage, employment or family status trigger a new 31-day period during which you’re allowed to make certain changes to your medical plan. (This period is referred to as a period of initial eligibility, or PIE. See the Enrollment section of A Complete Guide to UC Health and Welfare Benefits PDF for details on permitted changes.) Once you’ve made the changes, your TIP amount will be adjusted accordingly. If any excess tax has been withheld, you can get it back when you file your tax returns.
• If you enroll in medical coverage midyear without a PIE, you will be subject to a 90-day waiting period and your premium must be paid on a post-tax basis for the remainder of the year. See page 19 of A Complete Guide to UC Health and Welfare Benefits PDF for details.
• If you would prefer not to pay for your coverage on a pretax basis, you may cancel during your first 31 days of eligibility, during Open Enrollment in November, or within the first 31 days after you have an eligible change in employment or family status. The cancellation takes effect as soon as you complete the transaction, subject to payroll deadlines. Your take-home pay won’t be adjusted retroactively.
• If you go on a leave without pay or lose eligibility for benefits due to a reduction in your appointment rate, your participation in TIP automatically ends.

For federal income tax purposes, you will have imputed income for UC’s portion of the cost of coverage provided to your domestic partner and/or your partner’s children unless these family members are your tax dependents. You will also have imputed income for coverage provided to any grandchildren of your domestic partner if they are not your tax dependents. 

You will not have federal imputed income for coverage provided to your natural or adopted children and/or step-children who are the children of your spouse, even if they are not your tax dependents.

You will not have California imputed income for coverage provided to your domestic partner if the domestic partnership has been registered with the state of California.  If the domestic partnership has not been registered with the state of California, California imputed income will apply; however, if you have entered into a valid same-gender union, other than a marriage, in another jurisdiction, and California recognizes that union as substantially equivalent to a California registered domestic partnership, you may be able to exclude the imputed income from state taxation when you file your state tax return.

California imputed income will apply for covered children or grandchildren of your domestic partner if the children are not your tax dependents.

If you enroll for benefits through UCPath, you indicated during the enrollment process whether your enrolled family members (including your domestic partner and/or partner’s children or grandchildren) are your tax dependents, and whether your partnership is registered with the State of California. 

If you enroll for benefits as a retiree through UC Retirement At Your Service, you need to submit UC’s benefits enrollment form (UBEN 100) PDF to request insurance and to indicate whether you and your domestic partner are registered in California. An additional form and copy of your Medicare form are required for Medicare enrollees. 

If you have notified UC that you and your domestic partner are registered in California, you will not have California imputed income for your partner’s coverage. Any out-of-pocket premium cost for medical coverage for your partner will be deducted from your pay on a pretax basis for California income tax purposes. For federal tax purposes, you will have imputed income and the out-of-pocket premium cost must be paid on an after-tax basis.

You can submit a Declaration of Tax Dependency (UPAY 886) PDF at any time during the year.