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I'm going to be living with my parents and my girlfriend at my parents' house soon, both of us being full-time students. We wanted to do this so she wouldn't need to pay for a dorm here (NY is notoriously expensive when it comes to these things). If there's any money sent to my parents, it would most likely be through her parents.

My girlfriend will be filed as a dependent under her parents as she would still be virtually a resident from another state. I'm filed as a dependent under my parents. How would my parents file their taxes? They couldn't possibly claim us both, yet the household size would be larger. I can't help but feel there's a bit of a legal gray area when it comes to these types of situations. Would anyone know the proper, law-abiding way to carry out this plan?

  • Nothing seems gray to me unless you are violating some kind of restrictions due to rules on their domicile. This could be a violation of a lease or HOA rules, but as far as taxes you should be fine. – Pete B. Jan 14 '16 at 15:35
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I am not aware of any place that the tax forms ask, "How many people live in your house?" They ask how many dependants you have, and not everyone who lives in your house is your dependant. There are very specific rules about that.

If your girlfriend is being claimed as a dependent on her parents' tax return, then she cannot also be claimed on anyone else's return, and there's no need to investigate further.

To claim someone as a dependent, they have to meet a number of conditions. I am not a lawyer. See IRS Publication 17. But the gist of it is that they must, (a) either be a relative (there's a list of what sorts of relatives qualify) or live with you all year; (b) Living with you must not violate local law; (c) Must make less than $4000 per year; and (d) You must provide over half of their support.

Your girlfriend may meet the "live with you all year" or maybe not. But the real stumper is likely to be (d). Unless your parents are paying her tuition, they almost certainly don't meet this test.

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Your parents would file their taxes as they normally do. It would be as if your parents were landlords renting a room to your girlfriend. She would not be claimed on their taxes. If your girlfriend pays rent to your parents (through her parents or otherwise) it would be claimed as rental income. The household size wouldn't change because even though your girlfriend is living with your parents they are not financially responsible for her. Example: A landlord would not claim renters as dependents or in household size on their taxes.

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Your parents would not be able to claim her as a dependent as multiple people are not allowed to claim a single person as a dependent. Utilize the IRS website to show who you are and are not allowed to claim (https://www.irs.gov/uac/Who-Can-I-Claim-as-a-Dependent%3F).

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