Ezel / IRS Rulings / 1040012
Chief Counsel Advice 1040012 Released October 8, 2010 Advice

CCA 1040012: Health coverage for a dependent domestic partner was not FUTA wages

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This page covers one taxpayer's ruling from 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2010
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel Advice addressed whether a domestic partner who was an employee's dependent under IRC § 152 could be treated as a dependent for the FUTA exclusion. Counsel concluded that the FICA and FUTA provisions describing dependents were inclusive rather than exclusive, and that a dependent domestic partner could qualify for the FUTA exclusion. The advice therefore stated that the value of health coverage for the domestic partner was not FUTA wages. It also noted that private letter rulings could not be relied on by taxpayers other than their recipients.

Ruling snapshot

  • Question: Was the value of health coverage for an employee's dependent domestic partner excluded from FUTA wages?
  • Outcome: Advice given
  • Key authorities: IRC §§ 152 and 3306; Notice 2010-38

Full text (IRS public release)

ID: CCA_2010090809203732 Number: 201040012
Release Date: 10/8/2010
Office: -----------------------------
UILC: 3306.02-00

From: --------------------
Sent: Wednesday, September 08, 2010 9:20:41 AM
To: -------------------------
Cc: ---------------
Subject: RE: FUTA, Insurance and Domestic Partners

Greetings ------------

The issue raised by the agent was discussed here in the National Office and with Treasury in connection
with the development of Notice 2010-38. The conclusion reached at that time is that the FICA and FUTA
provisions relating to "dependent" aren't really definitions in the sense of an exclusive meaning. They're
instead worded to say "dependents" "include" an employee's family members. They do not preclude the
possibility that other individuals could also be dependents for purposes of the FICA and FUTA exclusions.

When the issue was discussed in connection with Notice 2010-38, we viewed the PLRs (e.g., PLR
200339001 and PLR 200108010) as expanding the group of dependents described in the FICA and
FUTA regs to include individuals who are dependents under section 152. Therefore, even though the
PLRs can't be relied on by taxpayers other than those who got them, it is Counsel's position that a
domestic partner who is a dependent of an employee under section 152 is also a dependent for purposes
of the FUTA exclusion. Thus, the value of the health coverage for the domestic partner isn't FUTA
wages.

Please let me know if I can be of further assistance.

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