Head of Household Guidelines
Some of your clients may inquire about claiming the head of household filing status. This filing status provides a lower tax liability and a higher standard deduction than the single filing status. Although many of your clients may think of themselves as the head of their household, they may not qualify for this filing status under state and federal tax laws.
To qualify for this filing status the taxpayer must meet all of the following requirements:
- The taxpayer was unmarried and not a registered domestic partner (RDP), or met the requirements to be considered unmarried or considered not in a registered domestic partnership as of the last day of the tax year.
- The taxpayer paid more than one-half the costs of keeping up his or her home for the year.
- The taxpayer’s home was the main home for the taxpayer and a qualifying person who lived with the taxpayer for more than one-half the year. Please see the legal definitions for Parent/Stepparent (Father or Mother) and Temporary Absence in FTB 1540, California Head of Household Filing Status for exceptions to this rule.
- The qualifying person was related to the taxpayer and met the requirements to be a qualifying child or qualifying relative.
- The taxpayer was entitled to a Dependent Exemption Credit for his or her qualifying person. However, the taxpayer does not have to be entitled to a Dependent Exemption Credit for his or her qualifying child if the taxpayer was unmarried and not an RDP, and the taxpayer’s qualifying child was also unmarried and not an RDP.
- The taxpayer was not a nonresident alien at any time during the year.
There are several resources available to assist you in determining if your client qualifies for head of household:
- The 2010 personal income tax instruction booklets for Forms 540/540A and 540 2EZ contain the general rules for using the head of household filing status.
- For detailed information, refer to FTB1540, California Head of Household Filing Status.
- FTB 1540SPAN is the Spanish version of the 1540.
- You can also access the same comprehensive information online on our HOH Webpage.
- The HOH self-test.
- Under the Practitioners Corner Webpage, you can find more information about the topics covered in our HOH seminar. See FTB 1585, Head of Household Workshop Supplement and our PowerPoint presentation in the June 2008 issue of Tax News.
By reviewing these sources and using the self-test to determine eligibility, most taxpayers can avoid a denial of their head of household filing status, and an assessment of additional tax plus interest.
For your clients who file electronically, we highly recommend having them file Form 4803e with their electronic return. By filing Form 4803e, (an electronic version of the HOH Audit Letter) with their electronic return, most electronic filers can avoid later receiving a paper copy of the HOH Audit Letter in the mail asking them to provide information about their qualifications for head of household filing status. They may, however, still receive a follow-up audit letter if they provide incomplete or conflicting information on the Form 4803e.