After getting divorced, you may notice a change in your taxes, along with everything else you are altering in your life. Tax time may mean a new filing status, as well as different eligibility for certain tax credits.
If you have always filed using the Head of Household tax status, you may not be eligible to continue to file that way after a divorce. Head of Household typically has a lower tax liability compared to the Single or Married, Filing Separately status that people generally use before they are divorced.
Your custody agreement plays a big part in determining if you are still eligible to file under Head of Household status. The privilege of filing Head of Household usually goes to the spouse who has custody more than 50% of the year. If each parent has a different child, conceived during the marriage, living with them for more than half the year, Head of Household status can be claimed by both spouses. This is the only way the status can be claimed by both parents.
Just having a child that you can claim as a dependent doesn’t automatically qualify you to file Head of Household. There are a variety of qualifications you must adhere to in order to file Head of Household such as:
- The household in which the child lives is maintained by you, even if the child isn’t your dependent.
- You have been living apart from your spouse for over six months, or are unmarried legally by the end of the tax year.
- You are a U.S. Citizen or resident alien throughout the entire tax year.
- You provide support for more than half of the household, including all expenses and costs.
- You must live in your own home and be the main home of the child, meaning the dependent lives with you over six months of the year.
You aren’t required to have a listed dependent in order to file Head of Household. In some cases you may qualify to file even if your ex-spouse claims the child.
If you file Head of Household, you may also qualify to file Dependent Care Credit and Earned Income Tax Credit, which can lower the tax amount you have to pay and generally help those with lower incomes.
If you haven’t yet divorced, but are separated from your spouse, you may file using Head of Household if you meet all of the requirements stated about.
Ensure your tax return is accurate and you meet all criteria for your chosen tax status before submitting your return. You are able to save money, and different statuses may qualify you for different deductions and credits.