Vermont taxable wages are shown on the W-2 separately from the federal wages. The Vermont wages are used for the recomputation. The recomputed return for Vermont will apply federal rules regarding the taxability of income as though you and your partner filed as married on your federal return. This may change your allowable exemptions and deductions. Also, the value of certain fringe benefits may be considered taxable wages for federal tax purposes when provided for a person other than an IRS-eligible dependent or spouse.
Federal law allows an employer to provide, as a non-taxable benefit, health insurance for a spouse.
Also, any premiums you pay for coverage for your partner and non-IRS eligible dependents will not qualify for a federal tax exemption. The Vermont tax is computed by applying federal rules as though you and your partner filed as married on your federal return. In most cases, this will mean that the employer's contribution is a non-taxed fringe benefit. To the extent that employers offer such a benefit to married couples, it is also available to civil union partners, but only at the state tax level. Civil union partners do not qualify for the benefit under the federal rules.