What are the Requirements for Head of Household When Filing Taxes?

Which filing status is the best option for you on your federal income tax return this year? More than one may apply, such as deciding with your spouse whether to file jointly or separately, but if you plan on filing as head of household, you must be sure you meet the requirements.

Filing as head of household and claiming tax credits like the child tax credit could create significant issues if you do not qualify for this status.

Cermak v. Commissioner of Internal Revenue

For tax year 2021, Cermak filed his federal tax return as head of household and claimed exemptions for his three children, the earned income tax credit, and the child tax credit for each child. The IRS disallowed his filing status as head of household and asserted penalties. At some point during the case and leading up to the court hearing, the IRS conceded the penalties. The issues for the US Tax Court to rule on were whether Cermak was entitled to the credits and whether he qualified as head of household for filing purposes.

The US Tax Court found that all issues relied on a determination of whether Cermak’s children were considered qualifying children.

Head of Household Requirements

Regarding the head of household designation, there are three requirements for qualifying for this status when filing federal taxes:

• The taxpayer is unmarried at the end of the tax year being filed
• The taxpayer has a qualifying child who lives with them for more than half the year
• The taxpayer contributes more than half the cost of maintaining their household

As with the filing status, claiming the earned income and child tax credits rely on Cermak’s children meeting the requirements of qualifying children. The IRS requires that children meet the following tests to be a qualifying child:

• Under 19 years old at the end of the year, under 24 and a full-time student, or be any age and permanently and totally disabled
• Be a biological child, adopted child, stepchild, foster child, grandchild, sibling, stepsibling, or half-sibling
• Live with the taxpayer for more than half the year, with exceptions for certain situations like college or hospitalization
• A qualifying child cannot file a joint tax return with another person to claim the earned income tax credit

Tax Court’s Decision

In Cermak’s case, the only factor doubted by the Court was that the children lived with the taxpayer for more than half the year. Cermak testified that his children should have been with him and that he should have had custody of them, but they did not live with him for more than half of 2021. Because of this, he did not qualify as head of household and could not receive exemptions or tax credits. The US Tax Court entered an order stating that there was a deficiency in Cermak’s income tax for 2021 in the amount of $10,763, but there was no penalty. For clarification on matters of child custody, contact Woodruff Family Law Group.