Tax Breaks for Single Parents

The IRS offers a few breaks for single-parent heads of household

Mother kissing son in bed
•••

KidStock / Brand X Pictures / Getty Images

Being armed with the right knowledge can take some of the stress and guesswork out of filing your taxes as a single parent, and it could save you some money at tax time. Several tax law provisions are designed to give a bit of a financial boost to those raising kids on their own, but you have to know what they are and how they work in order to take advantage of them. 

Below, we give you more information on the tax breaks that might work for you. 

File as Head of Household

Filing as head of household on your tax return provides two benefits for single parents: You’ll be able to claim a higher standard deduction, and you can earn more than single filers before you move into the next higher tax bracket.

The standard deduction for head-of-household filing status is $18,800 for the 2021 tax year and $19,400 for the 2022 tax year. 

You’ll qualify for head-of-household status if you were “considered unmarried” on the last day of the year (December 31), if you paid for more than 50% of your household’s expenses, and if your children lived with you for more than half the year. You’re considered unmarried if you’re single, divorced, or didn’t live with your spouse at any point during the last six months of the tax year. 

The rules for the head-of-household filing status are complicated and the benefits are significant, so speak with a tax professional if you think you might qualify. 

Child Tax Credit

A tax credit is different—and more beneficial—than a tax deduction. It's an amount of money subtracted directly from the tax bill you owe the IRS, so this can save you cash out of pocket that can be put toward other things. The child tax credit in particular is a tax break awarded simply for having a child or children. 

Your child must meet certain requirements set forth by the IRS to qualify for the child tax credit. They must be under the age of 18 on the last day of the year. They must also have lived with you more than half the year, and they can’t have contributed or paid for more than 50% of their own support needs.

The child tax credit for tax year 2021 is worth up to $3,600 per child, depending on the child's age. The income limit for a single parent filing as head of household is $112,500 for tax year 2021. If your income was more than that, the credit is phased out.

For the 2021 tax year, half of the child tax credit could be claimed through advance monthly payments of $250 or $300 per month (July through December). If you received those monthly payments, the other half of the credit can be claimed when you file your tax return in 2022. The expanded payment expires on Jan. 7, 2022. If you did not receive any monthly payments in 2021, you may be able to claim the entire credit when you file your return in 2022. You'll need to reconcile your advance monthly payments with the child tax credit that you can claim on your tax return come tax time.

Child and Dependent Care Credit

You might be eligible for the child and dependent care tax credit as well if you paid someone to care for your child while you went to work or looked for work during the tax year.

Your child must be under the age of 13 to qualify, or disabled if they’re age 13 or older and physically or mentally incapable of caring for themselves. The person responsible for taking care of your child can’t be their other parent or anyone you can claim as a dependent, either. The credit is a percentage of up to 50% of $8,000 in expenses for one child (so $4,000 total), or 50% of $16,000 for two or more children (so $8,000 total). You can't claim the credit if your adjusted gross income is $438,000 or more.

Earned Income Tax Credit

The earned income tax credit (EITC) is designed to help families with lower incomes. You might be eligible for a tax refund even if you didn’t earn enough to file a tax return if you can claim this credit because it’s a fully refundable tax credit. 

The EITC is worth different amounts based on the number of qualifying children you have. The below table shows the maximum amounts. The actual amount of the EITC for which you qualify will be based on your income. There are income limits and phaseouts, as well.

Number of Children  Maximum Value of EITC in 2021 
$1,502
1 $3,618 
$5,980 
3+  $6,728 

Additionally, investment income cannot exceed $10,000 for the 2021 tax year.

If your children don’t have Social Security numbers but are otherwise eligible, you claim the EITC under the terms for childless households in tax year 2021 via the American Rescue Plan Act (ARPA) rules.

By law, the IRS must hold your refund until mid-February if you claim the earned income tax credit. This gives the government time to make sure that everyone who claims the credit is legitimately entitled to it. 

What Are the Tax Brackets for a Single Parent?

A single parent who files taxes as the head of household for the 2021 tax year will pay 10% income taxes on income up to $14,200. The rate then increases to 12% up to $54,200, then 22% up to $86,350, then 24% up to $164,900, then 32% up to $209,400, then 35% up to $523,600. The top tax bracket rate of 37% applies to all head-of-household income beyond $523,600.

What Should a Single Mom Claim on Her Form W-4?

A single parent can claim each child they care for as a dependent on their form W-4. For example, if a single mom has two children, she may claim two dependents on her W-4. However, it's entirely up to the parent as to how they want to file their taxes. If a parent lives paycheck to paycheck, they may want to claim as many dependents as possible to maximize their take-home pay throughout the year. On the other hand, if the parent prefers to have a large tax refund, they may claim fewer dependents and decrease their take-home pay.

The Bottom Line

The federal government has some relief to offer if you’re raising children on your own. You might be able to earn more before moving into a higher tax bracket or be eligible for cash refunds for each of your children. Besides these tax credits, be sure to explore all of the tax credits and deductions on the IRS website.

Tax preparation software may be able to guide you through this entire process. You can use the IRS Free File software if you earned $72,000 or less in 2021, or you might want to consider enlisting the help of a tax professional.