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.
The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018 deadline, including a few retroactive changes due to the passing of tax reform. Some tax information below will change next year for your 2018 taxes, but won’t impact you this year. Learn more about tax reform here.
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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