Claiming Head of Household Filing Status
Filing as Head of Household Requires Passing a Three-Pronged Test
All taxpayers are not created equal. The Internal Revenue Code offers five different filing status options from which you must choose when you complete your tax return. Head of household is one of the most advantageous. Taxpayers who qualify for as head of household benefit from a higher standard deduction and wider tax brackets compared to the single filing status.
You can claim head of household filing status if you're unmarried or "considered unmarried" at the end of the year and you paid more than half the cost of maintaining your home for the year and you have one or more qualifying dependents who lived with you for at least half the year.
Yes, it's a bit complicated, and these are just the basic rules. Special rules also apply to separated parents and married couples who live apart from each other.
Head of Household Tax Rates and Standard Deduction
Your filing status determines the amount of your standard deduction amount and what tax rates you must use when you're calculating your federal income tax for the year. The head of household standard deduction for 2017 is $9,350. Contrast this with single filers and married individuals who file separate returns—they can claim only a $6,350 standard deduction. Married taxpayers who file joint returns get a $12,700 deduction, which works out to one $6,350 deduction for each of them, still well below the head of household amount.
The table below shows the tax rates that apply to head of household filers for the year 2017.
2017 Ordinary Tax Rates for Head of Household Filing Status
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The Unmarried Test
Normally, a taxpayer must be unmarried on the last day of the year to file as head of household. This means that you're single, divorced, or legally separated under a separate maintenance decree. You may be "considered unmarried" if you're still legally married but you lived in a separate residence from your spouse for at least the last six months of the year—from July 1 through the end of December.
You must file a tax return separate from your spouse and you must still meet the other two criteria for head of household status: the support test and the qualifying dependent test.
The Support Test
The support test requires that you must provide more than half the cost of keeping up your home for the year. Qualifying costs includes expenses like rent or mortgage payments, property taxes, property insurance, repairs, utilities, and groceries. Taxpayers can use Worksheet 1 in Publication 501 to determine if they meet the support test. Costs associated clothing, education, medical care, vacations, life insurance and transportation do not count.
Money received from public assistance programs such as Temporary Assistance for Needy Families does not count as financial support provided by a taxpayer who wants to qualify for head of household filing status. If you used funds from any of these sources, you can't include it as money you personally paid toward supporting your household. It's considered no different from living with another individual who also kicked in money toward expenses.
The Qualifying Dependent Test
A qualifying person must live in your home for more than half the year, and this is the most complicated rule.
Only certain types of closely-related relatives can be qualifying persons for the head of household filing status. They include:
- Your child, stepchild, adopted child, foster child, brother, sister, or a descendant of one of these individuals whom you claim as a dependent under the qualifying children rules;
- Your child, stepchild, adopted child, foster child, brother, sister, or a descendant of one of these individuals whom you would be eligible to claim as a dependent under the qualifying children rules but have elected not to claim as a dependent because you released the dependent's exemption to the noncustodial parent;
- Your mother or father who can be claimed as your dependent under the qualifying relative rules;
- Your brother, sister, grandparent, niece, or nephew whom you can claim as a dependent under the qualifying relative rules.
The IRS provides a well laid-out chart regarding qualifying persons in Table 4 of Publication 501.
Two Exceptions to the Residency Rule
A taxpayer and his qualifying person are still considered to reside in the same household during periods of temporary absence due to "illness, education, business, vacation, or military service," according to the IRS. The rule is that it's "reasonable to assume the absent person will return to the home after the temporary absence. You must continue to keep up the home during the absence." In other words, if your child lives away at school for a portion of the year, he still qualifies.
There's also a special exception for people who support their dependent parents. A parent can be a qualifying person for purposes of meeting the residency test even if she doesn't reside in your home as long as you can claim her as your dependent and you meet the support test. "If your qualifying person is your father or mother, you may be eligible to file as head of household even if your father or mother does not live with you. However, you must be able to claim an exemption for your father or mother. Also, you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother. You are keeping up a main home for your father or mother if you pay more than half the cost of keeping your parent in a rest home or home for the elderly," according to the IRS in Publication 501.
Tools for Determining Filing Status
The IRS has a filing status application on their website called What is My Filing Status? This Web application takes about five minutes to complete and can help you determine the filing status for which you qualify. The IRS also offers a Determination of Filing Status Decision Tree on page B-1 of Publication 4012.