Head of Household Filing Status: Rules and Tax Benefits

Your filing status is one of the first choices on a federal tax return, and it affects your standard deduction, tax brackets and eligibility for several credits. For unmarried taxpayers who support a child or another qualifying relative, head of household filing status can produce a noticeably lower tax bill than filing as single. It also has specific rules that the IRS checks closely. This guide explains who qualifies, how the tests work and how to avoid common mistakes.

Why Head of Household Matters

Compared with the single filing status, head of household generally offers:

• A larger standard deduction.
• Wider tax brackets, so more income is taxed at lower rates.
• In many cases, higher income thresholds for certain deductions and credits.

The IRS adjusts the standard deduction and bracket amounts each year, so check the current year's Form 1040 instructions or IRS publications for exact figures.

The Three Core Requirements

To file as head of household, you generally must meet all three of these tests.

1. You Are Unmarried or Considered Unmarried

You must be unmarried on the last day of the tax year, or "considered unmarried." You are considered unmarried if all of the following apply:

• You file a separate return from your spouse.
• You paid more than half the cost of keeping up your home for the year.
• Your spouse did not live in your home during the last six months of the tax year.
• Your home was the main home of your child, stepchild or foster child for more than half the year, and you can claim the child as a dependent, or could except that you released the claim to the noncustodial parent.

2. You Paid More Than Half the Cost of Keeping Up a Home

Costs of keeping up a home include rent, mortgage interest, property taxes, home insurance, repairs, utilities and food eaten in the home. They do not include clothing, education, medical treatment, vacations, life insurance or transportation. Public assistance received and used to pay these costs does not count as your own contribution.

Keep records such as leases, utility bills and receipts. If the IRS questions your status, you may need to show that you paid more than half.

3. A Qualifying Person Lived With You

A qualifying person generally must have lived with you for more than half the year. Qualifying persons can include:

• Your qualifying child, such as a son, daughter, stepchild, foster child, sibling or a descendant of one of them, who meets the relationship, age, residency and support tests.
• A qualifying relative you can claim as a dependent who meets the relationship tests.

Temporary absences, such as for school, medical care, business or military service, generally count as time living with you.

Special Rule for a Dependent Parent

Your parent does not have to live with you. You can qualify if you paid more than half the cost of keeping up your parent's main home for the year, including a nursing home or assisted living facility, and you can claim your parent as a dependent.

Situations That Do Not Qualify

• A boyfriend, girlfriend or unrelated friend generally does not make you eligible for head of household, even if you claim them as a dependent as a qualifying relative based on living with you.
• A person you can claim only because of a multiple support agreement does not qualify you.
• If you and another person share costs equally, neither of you paid more than half.

Divorced and Separated Parents

Generally, the custodial parent, the parent the child lived with for more nights during the year, is the one who can claim head of household based on that child. A custodial parent may release the dependency exemption for a child to the noncustodial parent using Form 8332, but the release does not transfer head of household status. The custodial parent can still file as head of household if other requirements are met.

Common Mistakes

The IRS treats head of household eligibility as an area requiring extra care. Paid preparers must meet due diligence requirements and complete Form 8867 when claiming it. Frequent errors include:

• Filing as head of household while still married and living with a spouse during the last six months of the year.
• Claiming based on a person who did not live with you for more than half the year.
• Not actually paying more than half of household costs.
• Two parents in the same home both claiming head of household.

An incorrect claim can lead to additional tax, interest and possibly penalties.

Documentation to Keep

• School, medical or childcare records showing a child's address.
• Lease or mortgage statements in your name.
• Utility bills and grocery receipts showing who paid.
• Custody agreements or court orders.

If someone else claimed your child or used your information on a return, the IRS may reject your e-filed return. Our identity theft recovery guide explains how to respond and request an Identity Protection PIN.

Head of Household and Withholding

If you qualify, update your Form W-4 with your employer so your withholding reflects the head of household status. Our W-4 withholding guide explains how to complete each step. Single parents often also benefit from education savings strategies such as CLEP exams to cut future tuition costs.

The Bottom Line

Head of household filing status can lower your federal tax by giving you a larger standard deduction and wider brackets than single status. To qualify, you must be unmarried or considered unmarried, pay more than half the cost of keeping up a home, and have a qualifying person who lived with you for more than half the year, with a special rule for dependent parents. Keep good records and use the IRS Interactive Tax Assistant if you are unsure.