Health Care

Health Care

How do health care reform and taxes connect? The Affordable Care Act is single largest change to the tax code in two decades. Find help navigating the complexities of the new health care legislation, Medicare, Medicaid and other medical deductions.

Reply
Pioneer
Posts: 1
Registered: ‎12-12-2016

domestic partners

we are domestic partners (opposit sex). do we have to file separate returns and as single in both?

I carry the health insurance for both effective Nov 1, 2016, each had separate before that.

Tax Pro
Posts: 5,199
Registered: ‎02-23-2016

Re: domestic partners

Hi Harley2017,

 

Welcome to the community.

 

Domestic partners are not considered married under state law in any state, so you each must file as a single taxpayer.

 

If you have health insurance from a provider other than the health insurance marketplace then you will be able to simply check off the box that says that you had health insurance for 2016 and enter your 1095-B or 1095-C information on your individual returns.  Note that Forms 1095-B and 1095-C are not required to file a tax return for 2016 tax returns because the IRS has extended the deadline for employers and private insurance companies to provide them to you from January 31st to March 1st.

 

You are considered married for tax purposes and should file either a joint tax return or a return using the "married filing separately" status if one of the following apply to you on the last day of the tax year:

  • You live together with your spouse in a common law marraige that is recognized by your state or by the state in which the common law marraige began.  (MFJ)
  • You are married and living together.  (MFJ)
  • You are married and living apart but not legally separated or divorced.  (MFS)
  • You are separated but not under a final decree of divorce.  (MFS)

 

I hope this helps you out.

 

Louis,

Senior Tax Advisor (Tampa, FL)

Highlighted
Pioneer
Posts: 2
Registered: ‎04-13-2017

Re: domestic partners

Hi Louis,

 

I'm a little bit confused by your post stating that domestic partners need to file as a single taxpayer regardless of state. California government website states "domestic partners who are registered with the California Secretary of State are required to file using the married filing joint or married filing separate filing status" .

 

In addition, it seems that there is not an option to indicate domestic partnership status on H&R Block on-line program. I'm concerned that this could cause people in domestic partnerships to inadvertently violate California tax regulations and file as "single" and pay the incorrect amount of tax (too much or too little).

 

Unless I'm mistaken in the points above, I would hope that these issues would be addressed quickly both for the benefit of H&R Block customers and for H&R Block.  My concern is that incorrect statements on the forum and lack of ability to indicate domestic partnership status on the on-line program could both mislead customers and expose the company to allegations of discrimination and a class-action lawsuit.

 

Kind regards,

Concerned Customer

 

 

Community Manager
Posts: 2
Registered: ‎05-04-2016

Re: domestic partners

Hi danielbman.

 

Welcome to the H&R Block Community, and thank you for your post.

 

This post highlights the complexity of the RDP tax treatment in federal vs. state returns. The first two posts of this thread discuss the federal return.

In response to your post about state tax returns and RDPs, the complexities associated with the tax situations found in a registered domestic partnership are further complicated for residents of community property states and may go beyond the capabilities of a DIY online/software tax product. H&R Block recommends that taxpayers with a RDP seek the assistance of a qualified tax professional.

 

Tax guidance from The Tax Institute at H&R Block:

Individuals who have registered domestic partnerships under state law will not be considered married for federal tax purposes and will not be able to file returns using the MFJ or MFS filing status. However, they may be able to file jointly or use a filing status similar to MFJ on their state returns.

 

State Tax Returns
State taxes can be more complicated and depend on each state’s laws and regulations. For couples living in states that recognize registered domestic partnerships and allow MFJ/MFS filing, these taxpayers may have to use different filing statuses for their state returns (generally MFJ or MFS) and their federal return (generally single). There are even more complications, depending on how the state computes taxable income. Taxpayers may have to complete a “dummy” federal return using the MFJ or MFS filing status to get the information needed to complete the state returns.

From https://www.ftb.ca.gov/forms/2015/15_737.pdf

In general, California affords the same rights and responsibilities to RDPs that previously were available only to married individuals. For California tax purposes, the same long-standing rules applicable to married individuals (relating to filing status, community property income, etc.) now apply to RDPs. However, because the federal government does not recognize domestic partners as married individuals for federal tax (IRS) purposes, RDPs shall continue to file as unmarried individuals on their federal tax returns.

 

I hope the information above helps to draw out the complexity of the RDP tax treatment in federal vs. state returns, and that if you have additional questions / concerns about your personal situation that the best course of action is to seek the assistance of a qualified tax professional.


Check BoxDid my reply help answer your question? Please mark it as an accepted solution by clicking on the green "Accept as Solution" button below. Thank you!
Pioneer
Posts: 2
Registered: ‎04-13-2017

Re: domestic partners

Hi Matt,

 

Thank you for your response.  Can you please point me to where it states this when you are using the on-line system when you file a California state return?  I've looked several times and can't find it. If it isn't stated there, don't you think there's a risk that California residents in domestic partnerships may have inadvertently incorrectly filed their taxes? In fact, that is exactly what happened to my friend, who was just featured on "7 on your side" -- San Francisco local news station. Thankfully he realized from talking to a friend that he needed to amend his taxes -- which caused him to get roughly 3,000 back. I'm very concerned about others who may not have been lucky enough to realize this!  

 

If I may provide a suggestion, perhaps you could consider implementing this feature for next year?  H&R Block claims to find deductions that others do not. However, while H&R block does not ask about RDP status, your main competitor does and would have correctly identified the extra $3,000 -- which is a pretty big difference! Or, if H&R Block does not want to support people in RDPs with the filing of state taxes, may I suggest being clearer within the on-line tax program that H&R Block on-line is not suitable for people in domestic partnerships. 

 

For people this year in RDPs who may have filed taxes incorrectly when using H&R Block online program and did not catch the "7 on your side" segment, will you do anything to help ensure that people are following CA tax code and receiving their appropriate refund?At the very least, can you please reply to this  post clarifying which states require people in domestic partnerships to file as joint, and what actions they should take if they filed incorrectly with H&R Block on-line program?

 

Kind regards

Concerned Customer