Hey Ladies: Don’t Miss Out on the Broke Boyfriend Tax Exemption

Posted in Filing Taxes , Tax • March 8, 2014

Female breadwinners of the household can save money when filing taxes this year with common — yet often misinterpreted — federal tax exemptions.

Federal tax exemptions are earnings that get subtracted from taxpayers’ adjusted gross income (AGI). Exemptions for dependents are often applied when claiming children or qualifying relatives as a dependent.

However, one question women fail to ask is: Can I claim my boyfriend as a dependent?

According to Publication 17 issued by the Internal Revenue Service, taking care of your broke boyfriend financially might entitle you to a $3,900 federal tax exemption.

While a boyfriend is traditionally not considered a “relative” under the definition of the U.S. government, a significant other may be identified as a qualifying relative dependent if he meets all the required tests.

Related: How to Claim Your Adult Child on Your Taxes

Claim Dependent Rules: Can I Claim my Boyfriend as a Dependent?

If you’re dishing out major funds to keep your boyfriend afloat, it’s time to get your fair share of the pie by claiming him as a dependent. However, not all living situations warrant this type of tax exemption.

To declare your boyfriend as a dependent, four tests must be successfully cleared to prove he is a qualifying relative. You must follow these claim dependent rules:

1. Non-Qualifying Child Test

This may seem like an odd test, but remember that the two categories under this exemption are for a “qualifying child” or a “qualifying relative.”

This test, in essence, prevents taxpayers from double-dipping by either claiming another taxpayer’s child or by claiming an individual in the home as both a child and relative.

Hopefully, in the case of your boyfriend, this qualifying relative test is one that passes with flying colors.

2. Relationship Test

Under the relationship test, your beau must have lived with you throughout the entire 2013 year as a member of the household. As a guide, allowing your boyfriend crash on your couch on weekends does not classify him as a member of the household.

If he did, in fact, live with you as a member of the household, you’re one step closer to a $3,900 exemption. However, if your boyfriend was your legal spouse at any point last year, he is no longer eligible as a qualifying relative.

3. Income Test

The qualifying relative income test states that the dependent must have less than $3,900 in gross income. Publication 17 defines gross income as “all income in the form of money, property, and services that is not exempt from tax.”

With the gross income requirement so low, this is where many claims fall short. If you’ve managed to check-off this qualifying relative test, there is a strong chance for you to recoup your funds — as long as you meet the final test.

4. Support Test

The support test requires a bit of math to assess whether or not your boyfriend is eligible to be your qualifying relative.

To pass the support test, first determine the total support provided to your boyfriend. Items like food, lodging, clothing, education, medical expenses, transportation and recreation should all be accounted for in this figure. Shared items like food and lodging must be equally divided among all household members.

The next key step is to identify how much you’ve contributed to support your boyfriend. In order to successfully complete this test, the amount of support you provide must be more than half of his total support received.

Below is an example of the support test in action, provided by the IRS website:

Grace Brown, mother of Mary Miller, lives with Frank and Mary Miller and their two children. Grace gets social security benefits of $2,400, which she spends for clothing, transportation, and recreation. Grace has no other income.

Frank and Mary’s total food expense for the household is $5,200. They pay Grace’s medical and drug expenses of $1,200. The fair rental value of the lodging provided for Grace is $1,800 a year, based on the cost of similar rooming facilities.

Figure Grace’s total support as follows:

Fair rental value of lodging

$ 1,800

Clothing, transportation, and recreation

2,400

Medical expenses

1,200

Share of food (1/5 of $5,200)

1,040

Total support

$6,440

Frank and Mary provide $4,040 (lodging, medical expenses and food) in support to Grace, which is more than half of her calculated total support of $6,440. In this situation, Frank and Mary — assuming they met the requirements of the first three tests — are within their right to claim Grace as a qualifying relative and receive the federal tax exemption.

Qualifying Relative Test: Does Your Boyfriend Pass?

If your living situation with your significant other meets all four tests, you’re well on your way to getting a significant exemption when filing your taxes. However, always make sure you have legal proof to support your dependency exemption claim.

Alison Flores of The Tax Institute at H&R Block tells us:

“If you claim a deduction for a dependent, you should keep documents on hand to support your deduction. Documentation includes birth and marriage certificates showing your relationship to the dependent, records that show you had the same address or addresses, canceled checks or receipts for household expenses (such as food, utilities, and rent) and canceled checks or receipts for your dependent’s expenses (such as clothing, education, out-of-pocket medical, and recreation).”

Lastly, there are two final conditions that need to be satisfied in order to claim your boyfriend as a dependent. He must be a U.S. citizen and you cannot file taxes as a couple via a joint tax return.

Claiming your boyfriend as a qualifying relative is not only justified if you’re absorbing his living expenses, but it’s a practical move especially in an economy where every dollar counts.

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