Please help by clarifying the rules for this scenario:
A&B are married in Aug 31, 2014, before this (for 8 months) B received health insurance through A's employer as a domestic partner. After the marriage the coverage was continued for the rest of the year (employer was notified of marriage). For the first 8 months the employer withheld taxes based on extra imputed income for the subsidized portion of the health insurance and also based on the fact that B's portion of the premium payroll deductions was not tax deductable. From Sept to Dec the employer correctly stops counting (for withholding) imputed income and the employee premium portion for B, but what about the previous 8-months?
What should the employer include on the 2014 W2? Do the non-married 8-months of employee premiums and employer subsidies become tax deductable (not inclued on W2) or are they still not deductable?
If the pre-married shouldn't be taxed, then I assume the employer should make sure this is reflected in the W2, but if this doesn't happen can A&B (assume they file jointly) take a deduction elsewhere or enter adjusted W2 amounts (with a note) for gross income? - Thanks!