Tax Advantages of Registered Domestic Partnership

[QmanReich]

My partner and I are considering registering with our home state of California as Domestic Partners. I am retired, but expect to claim approximately $20k in Schedule C income for 2022. I am not receiving any SSI or retirement income and will not be taking distributions from any retirement plans. My partner makes approximately $180k reported on W2 Earnings. We understand that in CA we'll have to file federal returns separately, but our state returns must be filed jointly. I've read that we must report each other's income on the CA State Returns. Does that mean I must suddenly claim half of her income, thereby reducing her income (according to the state of CA) by 50%? And do we split my meager Schedule C income in half as well? Or is there another method of splitting income? Are there any real tax advantages or disadvantages for registering as domestic partners. Additional factors include we do not own our home, it's a rental. But we've been living together for 10 years.

[melj1 · Accepted solution]

Registered Domestic Partners are considered single for federal tax returns. You would need to file a joint CA return or married filing separately but, all income and deductions would be divided equally as community property and that results in higher state taxes. You may save some taxes on the federal return because in some instances there is a marriage penalty. You could try to do a comparison by doing some test returns. You would need to do 3 returns to get an answer. Your, your significant other and the joint return. Generally the benefits of the RDP in California is: 1)Avoid married tax penalty; 2) Legal rights to children; 3) The right to adopt; 4) The right to bereavement leave; 5) Family leave for a partner in need. 6) Visitation rights; 7) Inheritance rights.