Getting divorced can have financial implications for how you file taxes. One question you might have is whether both of you can claim head of household if you maintain separate residences but share children. The IRS allows legally separated or divorced parents to claim head of household for a dependent child, but there are some requirements you’ll need to meet first.
A financial advisor can help you optimize your financial plan to lower your tax liability.
What Is Head of Household?
Head of household is a tax filing status that’s designed for parents or adults who have a qualifying dependent and meet other guidelines. To claim head of household on your taxes, you must:
- Be considered unmarried on the last day of the tax year
- Have a qualifying child or dependent
- Pay for more than half of your household expenses
For IRS purposes, ‘unmarried’ means that you file a separate tax return from your spouse or former spouse, the two of you maintain separate residences and your home was your child’s main home for at least six months of the tax year.
You must be able to claim the child as a dependent unless the noncustodial parent was granted the legal right to do so as part of a court-ordered separation or divorce agreement. Even then, you might still be able to claim head of household status if the child lived with you for more than half the year.
A qualifying child must be under age 19 if not a student, or 24 if they’re a full-time college student. If the child has their own income, they can’t have paid more than half of their living expenses during the tax year. Biological, adopted and stepchildren can all be counted as qualifying children when filing as head of household after a divorce.
If you’re separated or divorced, you can claim head of household even if you’re receiving child support or alimony. The only caveat is that you’d still have to pay more than half of your household costs yourself.
Can Both Divorced Parents Claim Head of Household?
IRS rules specify that to claim head of household, your child must live with you for more than half the year. Following that, only one divorced parent would be able to claim head of household if they share a single child who lives with one parent the majority of the time. Even if the majority is simply one day more out of the year, that would be enough to satisfy IRS standards.
However, two divorced parents could technically claim head of household if there’s more than one child involved. To claim head of household in that scenario, both parents would need to:
- Maintain separate residences
- Have at least one qualifying child who lives with them for more than half the year
- Pay more than half of household expenses themselves
For example, say that you’re divorced with two kids. You and your former spouse reside in different states. Your oldest child who’s in elementary school lives with you during the school year and stays at the other parent’s home over the winter break, spring break and summer vacation. The second child, who is a toddler, lives with the other parent full-time. You have scheduled visitations with the child in your home once a month.
In that scenario, you would both be entitled to file as head of household as long as you’re each paying more than half of your household expenses and the child who lives with you resides in your home at least six months out of the year. However, if one of you contributes to more than 50% of the household expenses of the other in child support or alimony, the recipient parent would be ineligible to claim head of household.
What Are the Benefits of Filing Head of Household?
There are five tax filing statuses the IRS allows you to claim: Single, married filing jointly, married filing separately, head of household and qualifying widow(er). There are two main advantages to claiming head of household in place of another status:
- Increased standard tax deduction
- Potential to be taxed at a lower rate
The standard deduction allows you to write off a flat dollar amount from your taxable income for the year. Head-of-household filers enjoy a higher standard deduction. For 2022, the deduction is worth $19,400, compared to $12,950 for single filers, married couples filing separate returns and qualifying widow(er)s. The deduction increases to $20,800 for 2023.
A higher standard deduction means more money you can deduct from taxable income, potentially pushing you into a lower tax bracket. That’s an advantage if you typically don’t itemize deductions on your return. If you normally get money back at tax time, claiming head of household could result in a larger refund.
What Happens If Both Divorced Parents Claim Head of Household?
How the IRS handles instances of two divorced parents claiming head of household status depends on the details. Specifically, it depends on which child each parent is claiming on their taxes.
If both parents claim head of household and list the same qualifying child on their tax return, that can raise a red flag. The IRS may accept the return of the parent who filed first and reject the return of the parent who filed second. Both parents may have their returns selected for audits if the IRS questions the discrepancy.
A tax audit by itself may not be problematic but it can become a worst-case scenario if fraud is suspected. Tax fraud is a serious offense that can result in steep fines or even jail time.
If both parents claim head of household but list different qualifying children on their tax returns, that won’t result in either return being rejected unless it contains other errors. Assuming you’re both claiming a qualifying child and you meet the other requirements to file head of household, there should be no further issues with your return.
Talking to a tax professional or your financial advisor can help you better understand how divorce can affect taxes. If it’s your first time filing taxes as a divorced parent, you may not be sure of what filing status to claim, or what tax credits and deductions you might be eligible for. A financial advisor can offer guidance on different strategies you might use to minimize your tax liability.
Can both divorced parents claim head of household? Not for the same child, but they could do so if they each have a qualifying child. Understanding the tax rules that apply for claiming head of household can help you stay on the right side of the IRS when preparing your return.
Tax Planning Tips
- Consider talking to a financial advisor about the best way to approach taxes following a divorce. If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Filing head of household can lead to a larger standard deduction but it’s important to compare that to what you might be able to deduct if you itemize. For example, you could deduct mortgage interest paid, state and local taxes, charitable donations, business expenses and eligible medical and dental expenses. Comparing your itemized deduction amount to the standard deduction you’re able to claim, based on your filing status, can help you to decide which one makes more sense.
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