Wednesday, October 22, 2008


This question was originally submitted as an unrelated comment to an earlier TWTP post.

Q. If a man (age 24) lived with and provided over half the support for his girlfriend (age 22) and her child (age 2) all year, can he claim them as dependents and file as Head of Household? Between her short job and interest earnings, the girlfriend didn't make quite $3,400.

A. First question – can the taxpayer claim his girlfriend as a dependent?

To be claimed as a dependent one must be either a “qualifying child” or a “qualifying relative”.

The first test for a “qualifying child” is that “the child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.” I assume that the “girlfriend” does not meet this test (are we talking about Arkansas?) – so she is not a “qualifying child”.

The tests for being a “qualifying relative” are –

1. The person cannot be your qualifying child or the qualifying child of any other taxpayer. We have shown that the girlfriend is not the taxpayer’s “qualifying child”, and let us assume she is not the “qualifying child” of anyone else (no info to the contrary provided) – so we assume she passes this test.

2. The person either (a) must be related to you or (b) must live with you all year as a member of your household (and your relationship must not violate local law). It is stated in the question that the girlfriend lived with the taxpayer, and we will assume that it was for the entire year – so she passes this test. If she moved in with the taxpayer in February she would not pass the test. The comment about “must not violate local law” has to do with common-law marriages – which I will say is not an issue in this situation.

3. The person's gross income for the year must be less than $3,400. The question indicates that her income was less than $3,400 - so she passes this test. The $3,400 mentioned here represents the amount of the personal exemption for 2007. For 2008 the amount to use is $3,500.

4. You must provide more than half of the person's total support for the year. According to the information provided the taxpayer did – so this test is also passed.

So the girlfriend is a “qualifying relative” – even though she is not related to the taxpayer.

There are now three (3) more tests to pass –

(1) Dependent Taxpayer Test - If you could be claimed as a dependent by another person, you cannot claim anyone else as a dependent. It appears that the taxpayer boyfriend is not being claimed as a dependent by anyone else, so this test is met.

(2) Joint Return Test - You generally cannot claim a married person as a dependent if he or she files a joint return. We should make sure the girlfriend is not married to someone else and filing a joint return with her spouse. Let us assume she is not (no info to the contrary) and say she passes this test.

(3) Citizen or Resident Test - You cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico, for some part of the year. There is no indication in the facts given that the girlfriend is not a US citizen – so we will assume she meets this test.

So, the girlfriend meets the tests for being a “qualifying relative” and the tests for being a dependent. The taxpayer boyfriend can claim her as a dependent on his tax return.

Next question – can the taxpayer claim his girlfriend’s 2-year old child as a dependent?

The question does not say that the taxpayer has legally adopted the child, so under the test we discussed above the child would not be his “qualified child”.

The first test for “qualifying relative” is that the person cannot be the “qualifying child” of another taxpayer. The child is the “qualifying child” of her mother. However this does not necessarily disqualify the child for the taxpayer boyfriend because according to IRS Publication 501 (Exemptions, Standard Deduction, and Filing Information) – “A child is not the qualifying child of any other taxpayer and so may qualify as your qualifying relative if the child's parent (or other person for whom the child is defined as a qualifying child) is not required to file an income tax return and either:

· Does not file an income tax return, or
· Files a return only to get a refund of income tax withheld

Based on her taxable income as presented, the mother does not have to file a federal income tax return, although she may file a return with no dependents and a “0” tax liability only to claim a refund of any income tax withheld on her small W-2 earnings.

However, if the mother filed a tax return to claim the Earned Income Credit based on her child, as could apply in this example, then the boyfriend could not claim the 2-year old as his dependent. If the boyfriend came to me to have his tax return prepared with the above information I would also want to see if the mother would be eligible for the Earned Income Credit (also available on the NJ state income tax return) and see how much of a credit she would receive.

It the EIC is not an issue then we can assume, based on the limited facts given, that the child would pass the other tests for being a qualifying relative and a dependent.

One must look carefully on the support test. If the mother is receiving child support payments from either the father or a government welfare program perhaps the boyfriend is not paying more than half the support for the 2-year old. We must also find out if the child’s father is claiming her as a dependent on his return using Form 8332. It is important to ask questions and get all the information before making a decision.

So we have determined that the taxpayer boyfriend can claim his live-in girlfriend as a dependent, and maybe the girlfriend’s 2-year old child as well.

Last question – can the taxpayer file as Head of Household?

According to Pub 501 – “You may be able to file as head of household if you meet all the following requirements.

1. You are unmarried or “considered unmarried” on the last day of the year.
2. You paid more than half the cost of keeping up a home for the year.
3. A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school)

The taxpayer boyfriend, it appears, meets the first two requirements.
A “qualifying person” is someone who “lived with you more than half the year, and he or she is related to you in one of the ways listed under Relatives who do not have to live with you on page 14, and you can claim an exemption for him or her.”

Page 14 of Pub 501 lists the “Relatives who do not have to live with you” as

· Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). A legally adopted child is considered your child.
· Your brother, sister, half brother, half sister, stepbrother, or stepsister.
· Your father, mother, grandparent, or other direct ancestor, but not foster parent.
· Your stepfather or stepmother.
· A son or daughter of your brother or sister.
· A brother or sister of your father or mother.
· Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

A person who is your “qualifying relative” only because he/she lived with you all year as a member of your household is not a “qualifying person” for purposes of meeting the Head of Household test.

Publication 501 specifically provides the following example (the highlight is mine)-

Example 3—girlfriend.

Your girlfriend lived with you all year. Even though she may be your qualifying relative if the gross income and support tests… are met, she is not your qualifying person for head of household purposes

So the taxpayer boyfriend cannot file his tax return as Head of Household.
Just a disclaimer - there was really not enough information provided in the question to answer the question with certainty. As I said above it is very, very important that all the "facts and circumstances" be given to your tax preparer so he/she can make an informed decision.
Does anyone have anything to add?

1 comment:

Anonymous said...

You did great job on this.