What is Head of Household?
Head of household is a formal IRS filing status for people who are single but provide financial support to at least one other person in his or her home.
How Does Head of Household Work?
Let's say Jane Doe is a single mother with three children. She has been divorced for three years. Because she pays at least half the cost of keeping up the home (property taxes, rent, utilities, etc.) and her children are under age 19, she can claim head of household.
Taxpayers can also claim head of household if they are unmarried and supporting a person over age 19 who is a full-time student or disabled and has earned less than half of his or her own financial support for the year. Taxpayers can also claim unrelated qualified people who received at least half of their financial support from the taxpayer.
Why Does Head of Household Matter?
Taxpayers who file as head of household typically pay a lower tax rate than what they would if they filed as single or married filing separately. Filing as a head of household gives a taxpayer some financial recognition for the fact that he or she is financially supporting dependents or other adults. In some cases, in the case of divorce, one spouse can claim head of household while the other spouse claims children as dependents in order to receive the child tax credit. However, to receive head of household status, the child must live with the taxpayer for at least six months of the year.