Most people claimed as dependents on tax returns are children or other relatives. But what you may not know is that under certain circumstances you can also claim someone as a dependent even if you're not related, as is the case with a domestic partner.
Why dependents matter
Once you identify someone as a dependent on your tax return, you're announcing to the IRS that you are financially responsible for another person. By law, taxpayers are allowed to reduce their taxable income by a certain amount for each dependent claimed on a tax return.
This amount is called an exemption, and for the 2017 tax year, the exemption amount is $4,050 per person. So if you're able to claim your domestic partner as a dependent, you should be able to reduce the amount of your income that's subject to tax by the exemption amount.
Several tests apply
You can claim your partner as a dependent if your situation meets all of the following conditions:
- No one else, such as your partner's parents, can claim your partner as a dependent child on their tax return
- Your partner must be a U.S. citizen, a U.S. national, a U.S. resident alien, or a resident of Canada or Mexico
- Your partner must live with you all year
- Your partner's gross income for the year—meaning income from all sources—cannot exceed the exemption amount. For 2017, that amount is $4,050
- You must provide more than half of your partner's financial support during the year
- Your partner cannot be married to someone else and file a joint return with that other person except to claim a refund of withheld income tax or estimated income tax paid
Income limit poses challenge
Tax expert Jonathan Weber, stresses that it can be difficult for a non-relative to meet all of the conditions necessary to be claimed as a dependent. "Most people don't realize just how many qualifiers a non-relative has to pass," he says.
The income limit is an especially tough hurdle. In most cases, Weber says, "even a part-time or seasonal job will put their income over the $3,950 limit." Working just 10 hours a week at $8 an hour, for example, would bring in more money than allowed.
Remember that your partner must live with you for the entire year to qualify as a dependent. If you moved in together in the middle of the year, you’ll have to wait until the next year before claiming your partner as a dependent.
On another matter related to living arrangements, certain "temporary absences" don't affect whether you and your partner would be considered living together. If one of you took a vacation, for example, or was deployed with the military, you would still be considered living together. The IRS says the following types of absences will not count against you:
- Illness, such as time spent in a hospital or rehabilitation facility
- Business travel or assignments
- Education-related absences
- Absences for military service
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