Overview

Cohabitating couples—two adults living together in an ongoing relationship but not legally married—are generally treated as separate taxpayers by the Internal Revenue Service (IRS). That means each partner files their own federal tax return (usually as single, or as head of household if they qualify). The couple cannot file as “married filing jointly” or “married filing separately” unless they are legally married. This distinction affects the standard deduction, tax brackets, eligibility for certain credits (such as the Earned Income Tax Credit and some child-related credits), and how household income is evaluated for income-driven benefits.

Sources: IRS publications and topic pages (see IRS Publication 501 and the EITC guide) explain filing statuses and credit rules (irs.gov).

Why filing status matters

Filing status determines the standard deduction, the tax-rate schedule applied to taxable income, and thresholds for many credits and phaseouts. Married couples who file jointly often benefit from:

  • A larger combined standard deduction (commonly about double the single amount) and wider tax brackets for combined income.
  • Simpler treatment of shared deductions and credits.
    Unmarried cohabitants miss those automatic, marriage-based benefits—but some may still qualify for advantageous statuses or credits on their own.

Note: Standard deduction amounts change annually with inflation. For a current reference see IRS Publication 501: https://www.irs.gov/publications/p501.

Common filing choices for cohabiting partners

  • Single: Most unmarried partners will file as single on their individual returns.
  • Head of Household (HoH): A single taxpayer who pays more than half the cost of keeping up a home for a qualifying person (usually a child or certain relatives) may be able to file HoH, which offers a larger standard deduction and better tax brackets than single status. See the IRS HoH rules: https://www.irs.gov/taxtopics/tc353.
  • Qualifying widow(er): Only available to those who were married and whose spouse died within the prior two years; not applicable to cohabitants who were never married.

If one partner can file HoH and the other files single, the household may end up with a lower combined tax bill than if both filed single—but eligibility depends on facts and documentation.

(For more on head‑of‑household rules and who qualifies, see our guide: Head of Household: Who Qualifies and Why It Matters.)

Credits and deductions—what changes and what may still apply

  • Earned Income Tax Credit (EITC): Eligibility depends on filing status, earned income, and (for the larger credit) qualifying children. Single filers can claim EITC if they meet the rules; cohabitation does not automatically disqualify either partner. See IRS EITC rules: https://www.irs.gov/credits-deductions/earned-income-tax-credit-eitc.
  • Child Tax Credit (CTC) and Additional Child Tax Credit: The credit is available to eligible individuals who claim a qualifying child on their return. An unmarried parent who has primary custody may claim the child and the credit; the other partner cannot claim the same child unless the custodial parent signs Form 8332 or releases the claim (state and custody facts matter).
  • Education credits, retirement savers credits and other income‑based credits: These are claimed individually; your filing status and individual MAGI (modified adjusted gross income) determine eligibility and phaseouts.
  • Itemized deductions and the standard deduction: Each partner chooses itemize vs. standard on their own return. If you own property together, mortgage interest and property tax deductions must be allocated based on who paid them and how title/ownership is structured.

In practice, I often see couples who split household expenses but fail to track who paid what. That makes it harder to substantiate deductions like mortgage interest or unreimbursed business expenses if only one partner is filing to claim them.

Practical examples and common scenarios

  • Child and custody: If Partner A has primary custody of a child, Partner A may be eligible to claim the child and file HoH (if other HoH tests are met). Partner B generally cannot claim the same child on a different return in the same tax year. This affects child‑related credits and the EITC calculation.
  • Shared home ownership: Suppose Partners A and B jointly own a home. Mortgage interest appears on Form 1098 in the name(s) on the mortgage; deduction claims should reflect who actually paid. If only one partner paid the mortgage from their account, that partner may be entitled to the deduction—but co-ownership agreements, title, and how funds were transferred should be documented.
  • Rental or side‑business income: Income generated by property or a business is reported by the person who receives it. Couples often decide whether to create a formal partnership or treat rental income as reported by one owner; this decision affects self‑employment taxes and who claims expenses.

I once advised a couple where one partner rented a room via a short‑term platform. Because the rental income and related expenses were handled in that partner’s name, they reported the income and claimed the allowable deductions on their individual return. Attempting to shift that income to the other partner without proper documentation would have raised audit flags.

Tax planning strategies for cohabitating couples

  • Track who pays what. Maintain a shared ledger (digital or paper) of mortgage, utilities, insurance, and other household payments. When tax season arrives, you’ll be able to show who paid deductible items.
  • Evaluate itemizing individually. In some households, one partner has large deductible expenses (medical, unreimbursed business expenses, mortgage interest) that make itemizing worthwhile for that person even if the other takes the standard deduction.
  • Consider formalizing arrangements where helpful. Domestic partnership registration (available in some states or localities) or written cohabitation agreements won’t change federal filing status but can clarify financial responsibilities and prove who paid specific expenses. (See our related article on formalizing domestic relationships: Tax Implications of Formalizing vs Informal Domestic Partnerships.)
  • Plan for benefits tied to marital status. Employer benefits, Social Security spousal benefits, and some state tax rules differ for married vs unmarried couples—count these into long‑term planning.
  • Use custody and support agreements intentionally. Custody arrangements influence who can claim dependents. If parents have a written agreement or a court order, use it to determine which party can claim child-related tax items.

Documentation and audit risk

Unmarried couples with mixed finances are sometimes more likely to trigger questions if tax positions are unclear. Keep clear documentation: receipts, bank records showing who paid, copies of rental agreements, Form 8332 if custodial parents release dependency exemptions/claims, and any signed cohabitation agreements. These documents help if the IRS requests proof of who qualifies for a dependent or who paid deductible items.

State tax and benefit differences

Federal filing status is independent of many state rules. Some states treat registered domestic partnerships similarly to marriage for state tax or benefits; others do not. Check your state revenue department for local rules. Also consider how living together affects eligibility for means-tested benefits; household composition and whether you share finances can change benefit calculations for programs administered at the state level.

Common mistakes and how to avoid them

  • Mistake: Assuming cohabitation equals marriage for tax filing. Fix: Only legally married couples can file married status federally.
  • Mistake: Both partners claiming the same child or the same deduction. Fix: Decide and document who has the legal right to claim the child or deduction before filing.
  • Mistake: Not tracking payments to substantiate deductions. Fix: Keep a simple shared ledger and save receipts for mortgage interest, property taxes, or large medical expenses.

FAQs

Q: Can cohabiting couples file a joint return?
A: No. Only legally married couples (or certain qualified residents of community property states with specific rules) can file jointly.

Q: Can one partner claim a child if the couple lives together?
A: Yes—if that partner is the custodial parent or otherwise meets IRS tests for claiming the child. Custody agreements, signed releases (Form 8332), and the residency test determine who may claim the child. Reference: IRS guidance on dependents.

Q: Do domestic partnership registrations change federal filing status?
A: No—state or local domestic partnership registration does not change federal filing status. It may affect state-level taxes or benefits depending on local law.

Where to get more help

  • IRS Publication 501 (Filing Status) and the EITC pages are primary sources for federal rules: https://www.irs.gov.
  • Consumer Financial Protection Bureau articles explain cohabitation and household finances from a consumer protection perspective: https://www.consumerfinance.gov.
  • For practical, site-specific guidance and deeper planning, consult a CPA or enrolled agent who understands both federal and state rules—especially if you share property, have children, or receive employer benefits.

Related FinHelp guides:

Professional disclaimer

This article is educational and does not replace personalized tax advice. Tax law changes frequently; consult a licensed tax professional or the IRS for guidance tailored to your situation.

Authoritative sources

  • IRS Publication 501, Filing Status (irs.gov/publications/p501)
  • IRS Earned Income Tax Credit (irs.gov/credits-deductions/earned-income-tax-credit-eitc)
  • IRS Topic: Head of Household (irs.gov/taxtopics/tc353)
  • Consumer Financial Protection Bureau — resources on cohabitation and household finances (consumerfinance.gov)

(Edited for clarity and updated for accuracy as of 2025.)