Head of Household

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Head of Household is a filing status for individual United States taxpayers.

To use the Head of Household filing status, a taxpayer must:

1. Be unmarried or considered unmarried at the end of the year
2. Have paid more than half the cost of keeping up a home for the tax year (either one's own home or the home of a qualifying parent)
3. In most cases, have a qualifying person who lived with the head in the home for more than half of the tax year, unless the qualifying person is a dependent parent (See Special rule for parents.)

Advantages

A taxpayer using the Head of Household filing status is entitled to use the Head of Household tax rates, which feature wider tax brackets.^[1] Also, the taxpayer is entitled to a larger standard deduction ($9,300 for tax year 2016) than taxpayers using Single or Married Filing Separately ($6,300 for 2016).

Considered unmarried

A person who is married on the last day of the tax year generally must use either the Married Filing Jointly or Married Filing Separately filing status. The exception is a taxpayer who is considered unmarried for Head of Household filing purposes and actually qualifies as Head of Household.^[2]

To be considered unmarried, a taxpayer must meet all the following tests:

1. The taxpayer must file a separate return.
2. The taxpayer paid more than half the cost of keeping up the home for the tax year.
3. The taxpayer's spouse must not have lived in the home at any time during the last six months of the year.
4. The taxpayer's home was the main home of his or her child, stepchild, or foster child for more than half the year.
5. The taxpayer must be able to claim an exemption for the child. However, this test is still met if the only reason that the taxpayer cannot claim the child's exemption is that the noncustodial parent is claiming the exemption (under a written release of exemption or a pre-1985 decree of divorce, decree of separate maintenance, or written separation agreement).

A taxpayer may also be considered unmarried for head of household purposes if the spouse is a nonresident alien, and the taxpayer does not elect to treat the spouse as a resident alien. In that case, the taxpayer is still considered married for purposes of the earned income credit.

Keeping up a home

To qualify for Head of Household filing status, the taxpayer must have paid more than half the cost of keeping up a home for the year. Costs to consider include property taxes, mortgage interest, rent, utilities, repairs and maintenance, insurance, and food eaten in the home. Costs such as education, clothing, vacation, and transportation are not included in the cost of keeping up the home.

Qualifying person

The following table^[3] determines who is a qualifying person for Head of Household filing status:

(1) Qualifying Child MUST meet all the tests. For Example a 25-year-old full-time student does not qualify as a child but may qualify as a Qualifying Relative if the tests are met. See Table 5 Pub 501 (2012). In this case you could not file as HOH. If the tests are met you could file as single or married filing separately and claim an exemption for the non qualified child.

Qualifying relatives

Other than a father or mother, the following types of relationships may qualify a dependent as a qualifying person for head of household purposes:^[4]

• Child, stepchild, foster child, or a descendant of any of them. (A legally adopted child is considered a child.)
• Brother, sister, half-brother, half-sister, stepbrother, stepsister.
• Grandparent or direct ancestor but not foster parent.
• Stepfather or stepmother.
• Son or daughter of the taxpayer's brother or sister.
• Brother or sister of the taxpayer's father or mother.
• Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

Any of these relationships that was established by marriage is not ended by death or divorce.

Special rule for parents

If the qualifying person is the taxpayer's father or mother, the taxpayer may file as Head of Household even if the father or mother does not live with the taxpayer. However, the taxpayer must be able to claim the exemption for the father or mother. Also, the taxpayer must pay more than half the cost of keeping up a home that was the main home for the entire year for the father or mother. The taxpayer is considered keeping up the father or mother's main home by paying more than half the cost of keeping the parent in a rest home for the elderly.^[5]

References