RDP is a Registered Domestic Partner. If you are a Registered Domestic Partner, the IRS does not recognize this partnership as a marriage. In California, RDPs have to file their federal and state tax returns separately. RDP couples have to file tax returns as “Single” or “Head of the Household.”
When living with a domestic partner without being married, you might be wondering how to prepare your tax returns. Not many people know what RDP is when it comes to filing taxes, but we are starting to see a great deal of discussion on this topic due to an increase in same-sex domestic partnerships.
Continue reading to find out how being a registered domestic partner relates to taxes.
What Exactly Does RDP Mean?
So, what is RDP in taxes? RDP stands for Registered Domestic Partner recognized under the law. States like Washington, Nevada, and California are allowing same-sex couples to register as domestic partners. These legal changes are providing registered domestic partners the same legal responsibilities and benefits as married couples. In states where community property is enforced, RDPs are subjected to community property rules (The Tax Adviser 2022).
As a registered domestic partner, you and your significant other have a legal relationship although you are not married. Although these people share a common domestic life, they are not considered a married couple under the eyes of the law. Nonetheless, they still receive many benefits as married people including hospital visitation and guaranteed right of survivorship. In addition, as an RDP, you may also have access to these benefits:
- Health insurance
- Death benefits
- Sick and family leave
- Parental rights
What Does the IRS Classify as a Domestic Partneship?
The IRS, as published on their website, considers domestic partnerships as the union between two unmarried individuals of the same or opposite sex who share a household.
Domestic partnerships are classified the same as civil unions and formal relationships that are not marriages under state law. RDPs are not considered to be married couples or spouses to federal tax laws.
What Does it Mean to be in a Registered Domestic Partnership?
In a nutshell, a registered domestic partnership represents the legal relationship of two individuals who are sharing a home and domestic life without being married to each other or other individuals. Although same-sex marriage is legal in all states, some partners still prefer to form other legal unions that don’t require getting married.
Having a registered domestic partnership allows the two individuals to receive the protection, benefits, and legal rights of marriage. However, when it comes to taxes registered domestic partners don’t have the same tax return guidelines as married couples.
The IRS does not allow registered domestic partners to file a federal tax return under “married” status because they are not legally married under state law. RDPs must file their tax returns individually.
What Does RDP Mean For Tax Purposes?
According to the IRS, RDPs have to file taxes individually under “Single” or “Head of Household” status. The two individuals may not file jointly even though they share a household as a couple.
Each year, the IRS considers the combined community income earned by each individual in a registered domestic partnership. Each person is entitled to receive a credit for half of the withheld income tax on the total combined wages.
In the case of registered domestic partnerships with children, the IRS considers the child as a “qualifying child” that can be listed as a tax dependent. If both RDPs is the parent of the child, they both have the right to claim the child as a tax dependent. Only one person can claim a dependency deduction in one particular year, both individuals cannot claim this at the same time.
In the case where the child lives with both parents for the same amount of time, the IRS will consider the “qualifying child” as a dependent of the parent that makes a higher adjusted gross income.
What is the Point of Creating a Registered Domestic Partnership?
A registered domestic partnership serves as an alternative to marriage for people who want to define their relationship status whether they are of the same or opposite sex. Essentially, the reason for entering into a registered domestic partnership is so that both individuals can receive some of the same benefits married couples are entitled to receive.
To qualify for some of the benefits, some entities require people to provide proof of legal partnership such as a joint bank account. This is not the case for married couples, as the marriage itself qualifies them to receive full benefits and they only need to show their marriage certificate.
Domestic partnerships may allow people to receive their partner’s health insurance benefits, adopt a child together, and many other advantages. Filing a Domestic Partnership Agreement is fairly simple and by making the union legally official, both individuals will receive an outline of the financial and legal considerations of the partnership.
Domestic partnerships often have fewer legal protections and benefits. This type of partnership agreement was created about 40 years ago and has been mainly been used by same-sex couples to receive particular estate planning and employment benefits that were only applicable to married couples. This trend significantly changed in 2015 when the Supreme Court allowed same-sex marriage.
How Do You Become A Registered Domestic Partner?
When interested in registering your domestic partnership, the first step is to compare the advantages and disadvantages of getting married. Once you determine that a domestic partnership is better for you than marriage, you must check your local laws regarding domestic partnerships.
The regulations of domestic partnerships vary from city to city, making your City Clerk’s office the first place to visit to find out what applies to your case. Here are general guidelines that are applied to domestic partnership registrations:
- Both individuals must be 18 years of age or older
- Both individuals must be single. They cannot be married or have a registered domestic partnership with someone else.
- The couple must live together with the intention to remain living together permanently
- The couple cannot be related by blood or marriage
- Both people must be mentally competent to sign the agreement or contract
- Both people must live in a city where domestic partnerships are offered or at least one partner must be an employee of that city
- Both parties have agreed to take on the responsibility for each other’s common welfare and living expenses
Is a Boyfriend Considered to be Domestic Partner?
Yes, a boyfriend or any other partner that shares your household has the potential to be a registered domestic partner. Both people must agree to a legal partnership and register in their local municipality. However, just because you live with your boyfriend does not automatically make him a domestic partner under the law.
Tax Filing Information
Each state has specific tax filing information when it comes to registered domestic partnerships. You must check with a professional tax consultant to find out what state and federal regulations apply to your case. Let’s review some common questions regarding filing under domestic partnerships.
What is Required to File as Married/RDP Filing Separately Status?
If you are married or have a Registered Domestic Partnership, you have the option to file taxes separately. Each person will report income and deductions on their separate tax return.
In California, you are required to permanently live in the state except for temporary travel. You must also meet the following:
- You lived separately from your domestic partner from July to December
- You normally file individual tax returns
- You contributed more than half of household expenses
Can Registered Domestic Partners File Joint Tax Returns?
No, RDPs cannot file jointly on their federal returns, but state laws may differ.
What About if my RDP is Deceased?
In some states, the surviving partner may be entitled to the estate of the deceased RDP. If bank accounts or properties were owned jointly, the surviving partner is entitled to those assets.
Are RDPs Entitled to Credits from Income Tax Withholding?
Yes, they are. Since each partner is taxed on the total community earned income, each person may receive a credit for half of the withheld income tax.
Does Innocent Joint Filer Relief Apply to RDPs?
Yes, RDPs are protected if their partners owe money to the IRS. Innocent Joint Filer applies to both registered domestic partnerships and marriages.
Do RDPs File Federal Tax Returns Separately?
Yes, RDPs must file federal tax returns separately under “Single” or “Head of Household” status. They may not file tax returns jointly.
What Does Not Legally Married RDP Mean For Taxes?
RDPs without a legal marriage means that you must file taxes separately instead of jointly. The IRS and tax specialists have a full list of all considerations for RDPs for proper tax filing.
Can I Claim my Domestic Partner on My IRS Form As A Dependent?
Yes, you will be able to claim your partner as a dependent under specific conditions including but not limited to:
- No one else can claim your partner as a dependent
- Partner must live with you all year long
- Partner’s income cannot exceed $4,300
- You must provide proof of financial support
What is RDP in California?
As in other states, RDP in California means the legal union of two individuals who share a household.
How is community property income adjustments calculated in California?
Start by combining your separate income with half of the community income. This figure will be added to the tax return Form 1040 and filed as usual.
How do I file domestic partnership taxes in California?
You must consult a California tax professional for your specific case as each individual is unique and has particular circumstances. Federal filing will be done individually, but California requires that state filings are done as a married return.
Can California domestic partners file taxes separately?
Yes, only the federal returns. State taxes are filed as a married couple in California.
What is RDP filing status?
The RDP tax filing status will be entered as “Single” or “Head of Household” under a separate return.
What is community income in California?
Since California is a common law state, community income falls under any money received from wages and salaries by both RDPs.
How Can I calculate Community Property Income Adjustments?
To calculate community property income adjustments, you combine your separate income with half of the community income. Then, you add the number to your tax return Form 1040 and file as you normally do.