In 2009, the Nevada State Legislature passed the Domestic Partnership Act (the “DPA”) [Nevada Revised Statutes, Chapter 122A] which permitted persons of the same sex and opposite sex to register as “domestic partners.” Ostensibly, the DPA was intended to provide domestic partners the “same rights, protections, and benefits” as well as the “same responsibilities obligations and duties” as are granted to and imposed upon spouses. As will be discussed, however, having the same rights and obligations as spouses is just not the same thing as marriage.
The problem is that the Nevada legislature is not Congress and does not have the power to rewrite federal legislation. Regardless of a person’s status as a domestic partner and regardless of Nevada’s intent that domestic partners be treated “as spouses,” domestic partners and married couples are not equivalent to each other in the eyes of the Federal Government. According to IRS Publication No. 555 (revised January 2014), “individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not called a marriage under state (or foreign) law are not married for federal tax purposes.”
Couples considering registration as domestic partners in Nevada should bear in mind the tax implications of their union. Notably domestic partners are not permitted to file federal tax returns using a married filing separately or jointly filing status, and only one of the domestic partners is permitted to claim their child as a dependent. Similarly, a domestic partner cannot use the head-of-household filing status if the his or her only dependent his or her domestic partner. While one of the domestic partners is permitted to be a dependent of the other, the gross income and support requirements of the tax code make it unlikely that the domestic partner will qualify as a non-spouse dependent.
Provisions of federal tax law such as section 65 (treatment of community income) or section 469(i)(5) (providing for an $25,000 offset for passive activity losses) also do not apply to domestic partners as they do with married couples. Ironically, however, domestic partners in community property states such as Nevada must each report half of the combined community income earned by the partners on their respective tax returns.
There are many other instances where the federal tax code treats domestic partners differently than married couples, and this post does not endeavor to list them all. The point is that federal law and, in some places, state law does not see domestic partnerships as the equivalent of a married couple. Even Nevada law does not require private or public employers to provide health care benefits to a domestic partner. See NRS 122A.210(1).
Same-sex marriage in Nevada has been legal since October 9, 2014, when the Ninth Circuit Court of Appeal, in Sevcik v. Sandoval, enjoined Nevada from enforcing its state constitutional ban on same-sex marriage. This means that couples of the same and opposite sex have a choice between domestic partnership and marriage. While both domestic partnerships and marriage are emotional bonds, they are also significant legal and financial commitments. Couples considering a domestic partnership would be well served by consulting with an attorney before tying the knot.