How much do you get for being head of household? Technically, you don't receive money from the U.S. government or IRS for being a head of household – you get extra tax benefits over filing single.
That might result in lowering your tax rate and taxes owed, or getting a refund of taxes you've already paid. Understanding how the head of household filing status works will help you make sure you file your taxes correctly to reduce the amount of money you owe or get a refund.
Video of the Day
Video of the Day
What Is Head of Household?
The U.S. government offers unmarried people supporting at least one child (or other family dependent) the opportunity to file as head of household. A head of household pays more than half of the support of a qualifying dependent, who must be either a qualifying child or relative, such as a dependent parent, explains TurboTax. To learn more about who qualifies as a dependent, visit the IRS website page that outlines the requirements.
Read More: Choosing Head of Household When Filing Your Taxes
What If You’re Divorced/Separated?
Only one parent can claim head of household status, since a head of household must pay more than 50 percent of the dependent's expenses. This prevents a divorced couple from each claiming head of household status and getting this tax benefit..
If you are divorced, make sure you and your ex are on the same page, or you could both have your tax filings rejected. This might be something you want to be clarified as part of a divorce settlement, or put in writing during a separation if you are not filing jointly. If your partner is recently deceased, you might be asked to provide a death certificate if you are audited.
Read More: Child Tax Credit: What Is It & How to Qualify
Show Me the Money
If you qualify as head of household, your standard deduction increases from the $12,550 for the single status in 2021 to $18,800, explains TurboTax. Depending on your income, you will probably be taxed at a lower tax rate (that means you'll fall into a lower tax bracket) than if you simply filed as single. The amount you'll save will vary, based on your taxable income and the tax bracket you move into as head of household.
Read More: What's Different About the 2021 Child Tax Credit?
Child Tax Credit
Your head of household status also helps you if you are taking the Child Tax Credit. Based in part on the struggles of families during the COVID-19 pandemic, Congress increased the amount of this credit, explained at WhiteHouse.gov.).
For the 2021 tax year, the credit is $3,000 per child six years and older (up from $2,000 in 2020) and $3,600 per child for children younger than six (also up from $2,000 in 2020). Children up to age 17 qualify in 2021 (up from age 16). However, note the original limits are expected to go back in effect for the 2022 tax year unless legislation occurs.
As a head of household, you can claim this full tax credit if your income is $112,500 or less (instead of $75,000 if you did not claim head of household). Earning more than that but under $200,000 means a phased out credit. These amounts are for 2021, unless Congress renews this change for 2022 and subsequent years, or makes it permanent.