Can a self-employed person claim their domestic partner who has no income as a dependent, and if so, How? (EDITED)

[JoyceMW]

I've been using Turbo-tax to prepare taxes for myself and family members for years and am stymied this year.  My son is self-employed as a free-lance writer and has filed as Single, self-employed.  He and his girlfriend have lived together for about 14 years and she had a job so filed her taxes as Single, employed for years.  However, during the Covid-19 pandemic scare, she was on leave from work until it was no longer an option.  When the time came to either return to work or quit working in 2021, they decided his income was sufficient so she did not need to resume working.  In 2021, they filed separate returns, as she had some unemployment and other tax implications.  However, for 2022, she has no income of any kind.  I've researched if he can claim her as a dependent, since he pays for all expenses.  However, when I enter information about her being a dependent, Turbo-Tax seems to want her to be entered as a Spouse.

1. Can she be claimed as his dependent?

2. How should it be entered so TurboTax doesn't require "spouse" designations?

P.S. His Federal and State taxes have already been filed and accepted for 2022, so it would now require filing an amended return if it is possible for him to claim her.

One other consideration -- with her low income when she did work in prior years, and no income now, since they aren't married, she is covered by Michigan Medicaid.  She has some health issues that Medicaid has covered and there is some concern that if she is claimed as a dependent, it would change her eligibility for Medicaid.  Any idea what that impact might be?

[DoninGA · Accepted solution]

This should be simple.  He enters his Filing Status as Single.  Then he can claim his partner as a dependent using the Qualifying Relative rules, provided she meets all the requirements.

To be a Qualifying Relative -

1. The person cannot be your qualifying child or the qualifying child of any other taxpayer. A child is not the qualifying child of any other taxpayer if the child's parent (or any other person for whom the child is defined as a qualifying child) is not required to file an income tax return or files an income tax return only to get a refund on income tax withheld.
2. The person either (a) must be related to you or (b) must live with you all year as a member of your household.
3. The person's gross income for the year must be less than $4,400 (social security does not count) in 2022
4. You must provide more than half of the person's total support for the year.
5. The person must be a U.S. citizen or a U.S., Canada, or Mexico resident for some part of the year.
6. The person must not file a joint return with their spouse.

[VolvoGirl]

Yes if she lived with him all year and made less than $4,400 he can claim her as an Other Dependent.  Don't know why it thinks she is a spouse.  Don't pick married or Joint.  He is still Single.  

Who can I claim as a dependent?

https://ttlc.intuit.com/community/credits-and-deductions/help/who-can-i-claim-as-my-dependent/00/267...

[JoyceMW]

I left the Filing Status as SINGLE, and continued through all the categories for business and personal income and deductions and credits.  On several screens, it started showing a Spouse column next to the main column for various entries.  So, I'm stymied.

[JoyceMW]

The next question then becomes, since they aren't married, can they continue to file separately and, since she had no income, does she even have to file returns?

[Vanessa A]

Since they are single, they cannot file a joint return.  He could potentially claim her as a dependent and get a $500 Other Dependent Credit, but that is the extent of her affect on his taxes.

If she had no income, then no, she does not need to file a return.  In fact, without income she cannot file a return. 

[JoyceMW]

I read in the Turbo-Tax Help information that you actually CAN file a return with no income.  It cannot be e-filed and has to be mailed.  The justification given was that filing with zero income would ensure there is not a gap in the tax filings when and if a future tax return is filed, otherwise it could be flagged for audit because of a "missing record."

[AliciaP1 · Accepted solution]

Yes, if it is a short interruption of income that is causing this, she should mail in a $0 return.  If, as you say, she does not intend to go back to work, and has no income or plans to have any soon, she can stop filing.  Then, if she does need to file a return again in the future and receives an inquiry from the IRS, she can simply respond with a letter stating her situation and the lack of need to file.  If she is truly not receiving any income and therefore no income is being reported to the IRS, even if the gap is only 1 year, subsequent filing years should not cause a problem.

@JoyceMW 

[JoyceMW]

Thank you.  @AliciaP1 .  I explained their options to them and she is going to file her own $0 return.  She is currently developing a blog that may generate income for her in the future.  If it doesn't, she may return to the workforce or pursue higher education.  Whatever they decide for the future will determine their next steps for 2023 and beyond.