Are you and your significant other living together, but not married? If so, you likely share many expenses. One of you may even financially support the other.
If that’s the case, you may wonder whether you can take advantage of any tax benefits by claiming your partner as a dependent on your tax return.
Claiming a dependent on your taxes can help to lower your taxable income, but does your significant other actually count as a dependent? Here are the facts on how you could claim a domestic partner on your tax return according to the IRS dependent rules.
What are the benefits of claiming my boyfriend or girlfriend as a dependent?
Claiming someone as a dependent means you support that person financially. That includes paying for their food, clothing, housing, and other essentials. Providing more than half of their financial support during the year can qualify you to claim a dependency exemption, which in turns allows you to reduce your taxable income and save you money.
For the 2017 tax year, claiming someone as a dependent reduces your taxable income by $4,050. Of course, reducing your taxable income usually means more money in your pocket come tax time. So, if you meet the qualifications of claiming your significant other as a dependent, it may be worth it when you go to file your taxes in April.
What are the stipulations for claiming my significant other as a dependent?
The IRS dependent rules are very particular regarding who qualifies. Many couples don’t fall within the IRS rules and will have to file taxes as individuals if they are not yet married. If you are uncertain about whether you can claim your domestic partner on your tax return, TaxAct can help you determine whether the individual qualifies during the filing process.
According to the IRS dependent rules, only qualifying children and relatives count as dependents. But don’t let the term “relative” confuse you. A domestic partner can be considered a relative under the IRS’ regulations if he or she meets certain qualifications.
To claim a boyfriend or girlfriend as a dependent, your situation has to meet all of the following IRS requirements:
You must live together
To qualify as a dependent, your significant other must have lived with you for at least one calendar year. If you lived together for a shorter amount of time, you cannot claim your significant other as a dependent.
Your significant other earned less than $4,050 in 2017
With the IRS dependent rules, to claim your boyfriend or girlfriend as a dependent, he or she could not have earned more than $4,050 during the tax year.
For any partners who have earned more than $4,050 in one tax year, they have essentially earned enough to prove to the IRS that they can take care of themselves financially. Even if you live with your partner and you pay most of the bills, if your significant other earned more than the threshold in a year, then you won’t be able to claim your boyfriend or girlfriend as a dependent on your tax return.
You must provide more than 50 percent financial support
You may be able to claim your significant other as a dependent on your taxes if you pay for over 50 percent of his or her basic living expenses. Living expenses may include housing, education, medical expenses, and more.
Don’t forget that you will need to keep track of all expenses to prove that you provide more than 50 percent of financial support. File away all receipts, documentation, and bills so you have them handy when you need them. Documentation is key when you are claiming any sort of special tax deduction or exemption.
When can’t I claim my significant other as a dependent?
Even if you and your partner meet the above qualifications, the IRS dependent rules include several caveats that provide further restrictions.
For instance, you cannot claim your partner as a dependent if someone else claims him or her as a dependent on their tax return. Each dependent can only be claimed by one taxpayer. If your significant other is claimed by his or her parents, children, or ex-spouse, you cannot claim him or her as a dependent.
Further, you cannot claim your significant other as a dependent if he or she is not a citizen or resident of the United States. Residents of Canada or Mexico also qualify.
What About the Child and Dependent Care Credit?
The dependent care tax credit is a tax break available for people who provide care for those who are unable to care for themselves, whether that be physically or mentally. Caretakers can claim the dependent care credit for up to $3,000 worth of qualified expenses.
Though they may sound similar, claiming your partner as a dependent is different than claiming the dependent care credit. You can’t claim a dependency exemption on your taxes unless your significant other falls in line with the IRS dependent rules.
How Do I Actually Claim My Partner on My Taxes?
Now that you know whether or not you can claim your partner as a dependent on your tax return, you may be wondering how you can actually make the claim.
You will want to look for terms like “other qualifying dependent” or “other qualifying relative” to claim your significant other on your taxes. If you file your return using TaxAct, the software will ask you questions about your dependents to ensure you claim anyone that qualifies.