Understanding the Head of Household Tax Status: Eligibility and Benefits for Single Parents

The Head of Household tax status is a beneficial designation for individuals who meet certain criteria. This status allows eligible filers to enjoy lower tax rates and a higher standard deduction compared to single or married filing separately individuals.

Eligibility for Head of Household Status

To meet the requirements for filing as Head of Household, one must satisfy the following conditions:

Marital Status

Unmarried or considered unmarried on the last day of the year Single or eligible to be claimed as a dependent on the federal tax return

Cost of Homekeeping

Must pay more than half the cost of keeping up a home for the tax year

Qualifying Person

Must have resided with the filer for more than half the year (excluding temporary absences) For parents, no residence requirement if the filer can claim the parent as a dependent and pays more than half the cost of keeping up the home

Examples of Qualifying as Head of Household

Example 1: An unmarried parent with a son who lived with them for the year. If the son is single and does not provide more than half his own support, the parent can claim the son as a qualifying child and thus as a qualifying person.

Example 2: An unmarried parent with a son who is 25 and has a gross income of $5,000. Although the son would meet the gross income test, he would fail the age test and cannot be considered as a qualifying person.

Example 3: An unmarried parent who lives with their girlfriend. The girlfriend may be a qualifying relative but would not be a qualifying person because there is no familial relationship.

Example 4: An unmarried parent who lives with their girlfriend's child. The child cannot be considered a qualifying person as they are not related to the parent.

Special Rules

For parents, a special rule allows an individual to file as head of household even if the parent does not live with them if the individual is able to claim the parent as a dependent and pays more than half the cost of the home.

The death or birth of a qualifying person during the year does not disqualify the filing status. However, the qualifying person must meet certain conditions, as detailed elsewhere in the publication.

Temporary Absences: The presence of a qualifying person is not disrupted due to reasonable temporary absences such as illness, education, business, vacation, military service, or detention in a juvenile facility.

Tax Benefits of Head of Household Status

By filing as Head of Household, the tax rate is generally lower than that of single or married filing separately individuals. Additionally, a higher standard deduction is granted, which can significantly reduce taxable income. This can translate to substantial savings in annual tax liability.

Advanced Scenarios and Considerations

For individuals adopting or fostering children, there are additional scenarios where head of household status may apply, provided certain conditions are met. The main home for the adopted or fostered child must be maintained for more than half the year for the child to be considered a qualifying person.

Understanding the head of household tax status can provide significant financial benefits for single parents and others who meet the requirements. Seeking professional tax advice can help ensure maximum benefits are realized.

Keywords

This article is relevant to those seeking information on Head of Household, Single Parent situations, and Tax Benefits related to the filing status.