IRS: California Domestic Partner Must Report Own Personal Services Income

In Chief Counsel Memorandum 200608038 (2/24/06), the Associate Chief Counsel (Income Tax & Accounting) stated that an individual who is a registered domestic partner in California must report all of his or her income earned from the performance of his or her personal services, notwithstanding the enactment of the California Domestic Partner Rights and Responsibilities Act: 

  This Chief Counsel Advice responds to your request for assistance. Specifically, you have asked our office to address the manner in which the California Domestic Partner Rights and Responsibilities Act of 2003 is to be taken into account in computing the federal income tax of a registered domestic partner. In accordance with § 6110(k)(3), this advice may not be used or cited as precedent.

Issue: For tax year 2005, is a California individual who is a registered domestic partner, under the California Domestic Partner Rights and Responsibilities Act of 2003, required to include in gross income all of his or her earned income for 2005 or one-half of the combined income earned by the individual and his or her domestic partner?

Conclusion:  An individual who is a registered domestic partner in California must report all of his or her income earned from the performance of his or her personal services.

(Hat Tip:  Pat Cain & Mike McIntyre.)