Overview

Living with a romantic partner or roommate changes more than where you keep your toothbrush — it changes how certain federal tax rules apply. Unmarried partners do not get the same automatic benefits and reporting options available to married couples, and many tax outcomes hinge on who owns property, who pays bills, and who qualifies as a dependent or household head.

This article summarizes the common scenarios I see in practice, explains the IRS rules that matter most, and gives practical recordkeeping and planning steps you can use to avoid costly mistakes. The guidance cites IRS publications and consumer resources so you can dig in further. (For full tax planning, consult a qualified tax professional — this is educational information, not tax advice.)

Core rules that apply to unmarried partners

  • No joint federal return: If you and your partner are unmarried, you cannot file a joint federal income tax return. Each person files as single, head of household (if eligible), or another status that fits (see IRS Publication 501) (IRS, Publication 501).
  • Filing status matters for credits: Some credits and deductions depend on filing status. For example, the Earned Income Tax Credit (EITC) is not available to taxpayers who use Married Filing Separately; unmarried partners can qualify individually if they meet the EITC rules (IRS Earned Income Tax Credit guidance).
  • Who paid matters: Generally, only the person who actually paid an expense can deduct it on their return. That applies to medical expenses (deductible to the extent they exceed 7.5% of AGI, per IRS Publication 502) and home office or unreimbursed business expenses.
  • Ownership matters for property tax benefits: Mortgage interest and property tax deductions normally go to the person who is legally liable for the loan and who actually paid the amounts (IRS Publication 936 on mortgage interest).

Sources: IRS Publication 501 (Filing Status and Exemptions), Publication 502 (Medical Expenses), Publication 936 (Home Mortgage Interest), IRS EITC page (irs.gov).

Common scenarios and implications

Below are real-world scenarios I encounter frequently, with clear action steps.

1) Two partners who both work and rent

  • Federal tax: Rent is not deductible on your federal return except in limited cases (e.g., home office deduction if you qualify). If only one partner pays utilities or a service, that partner generally cannot deduct the other partner’s portion unless they are reimbursing.
  • Practical step: Keep a shared ledger (bank transfers and receipts) showing who paid what each month. That documentation matters later if you need to substantiate home-office or medical payments.

2) One partner claims a dependent (child) and the other helps pay bills

  • Key rule: Only one person can claim the same qualifying child or dependent on a federal return for a year. The qualifying child tests (relationship, residency, age, support) are in IRS Publication 501. If both partners want the tax benefits, they must follow the tie-breaker rules in the IRS code or have a written agreement about who will claim the child. Misreporting can trigger audits and amended returns.
  • Practical step: Decide year-by-year who claims the child. Keep records showing who provided more than half the child’s support.

3) Partners buy a house together

  • Ownership title and mortgage liability affect deductions. If both names are on the mortgage but only one is on the title, deduction eligibility can differ. The IRS generally allows mortgage interest deductions to the person who is legally obligated on the loan and who actually paid the interest (Publication 936).
  • If one partner makes most of the payments but title is in both names, consider a co-ownership agreement that clarifies contribution and ownership percentages.

4) Shared medical expenses

  • Medical and dental expenses are deductible only by the person who paid them, and only to the extent they exceed 7.5% of that taxpayer’s adjusted gross income (AGI), per Publication 502. If partner A paid for partner B’s bills, partner A may be able to claim the deduction if the payment meets IRS rules for treating the amounts as paid by them. Record invoices and payment receipts.

5) Head of household (HOH) eligibility

  • One partner may qualify for Head of Household filing status if they are unmarried, paid more than half the cost of keeping up a home, and a qualifying person (such as a dependent child) lived with them for more than half the year. HOH offers a higher standard deduction and more favorable tax rates than filing single (see IRS Publication 501).

6) Marketplace premium tax credit and health coverage

  • If you apply for premium tax credits through the Health Insurance Marketplace, eligibility depends on the tax household reported on your income tax return. Unmarried partners are treated separately unless they file a joint return (which unmarried people cannot do), so marketplace calculations and reconciliation on Form 8962 follow the filer’s household. Check IRS and HealthCare.gov guidance before filing.

Recordkeeping and documentation (my practice tips)

In fifteen years advising clients, the single most effective thing I recommend is consistent documentation:

  • Maintain a shared spreadsheet or use a personal finance app showing who paid what and when.
  • Save bank transfers, canceled checks, invoices, and proof of payment for large shared items (mortgage, tuition, medical bills).
  • When one partner pays an expense on behalf of the household, use a formal reimbursement or assignment to clarify tax ownership of the payment if necessary.
  • If you co-own property, record the ownership percentages in a written agreement; this helps on sale or when claiming interest/property tax deductions.

Planning strategies worth considering

  • Decide who will claim dependents and credits before filing. A simple year-end agreement reduces audit risk.
  • If you may qualify for Head of Household, calculate both HOH and Single filing outcomes before filing to choose the correct status. (Note: you cannot file as HOH unless you meet the IRS tests.)
  • For couples buying a home, align title and mortgage liability with your intended tax and legal outcomes.
  • Consider a cohabitation agreement that documents financial contributions and ownership shares. This is legal protection more than a tax tool, but it clarifies tax evidence.

Common mistakes to avoid

  • Assuming you can file jointly as an unmarried couple — you cannot.
  • Not documenting who paid large medical or childcare expenses — that often causes missed deductions or disputes.
  • Treating informal transfers as deductible payments. Gifts between partners or reimbursed personal transfers are not automatically deductible.

When community-property or state rules matter

Community-property rules typically apply only to married couples. However, state laws vary widely on property and debt rights for unmarried partners, and state tax rules can differ from federal rules. If you live in a state with unique rules or you move between states during the year, consult a tax pro and your state tax agency.

Frequently asked questions (brief)

  • Can my partner claim me as a dependent? Rarely. The IRS has strict tests (gross income, support, residency, and multiple support agreements). See Publication 501.
  • Who can claim the Earned Income Tax Credit if we live together? Each partner may claim EITC only if they meet the IRS qualifying rules and only one taxpayer can claim a qualifying child. Carefully follow IRS EITC guidance.

Local and federal resources

Internal resources on related topics:

Final considerations and professional disclaimer

Living with a partner introduces tax questions that affect refunds, liabilities, and future planning. In my practice, careful documentation and an annual planning conversation sharply reduce disputes and missed savings. This article summarizes general federal rules as of 2025; tax law and IRS guidance change periodically. For tailored advice about your situation — especially when children, property or large medical bills are involved — consult a CPA or enrolled agent.

(Author: Senior Financial Content Editor, FinHelp.io)