How Does the IRS Prove Head of Household?
Claiming Head of Household status involves specific IRS verification. Learn how to substantiate your eligibility with the right financial and residency records.
The Head of Household filing status offers tax advantages, including a larger standard deduction and more favorable tax brackets compared to filing as Single. Because of these benefits, the Internal Revenue Service (IRS) establishes specific criteria to verify a taxpayer’s eligibility based on marital status, financial contributions, and relationship to dependents.
The Three Tests for Head of Household Status
To claim Head of Household (HoH) status, a taxpayer must satisfy three tests set by the IRS. Failure to meet any one of these requirements will disqualify a taxpayer from using this filing status.
The Unmarried Test
The taxpayer must be unmarried or “considered unmarried” on the last day of the tax year. A taxpayer is considered unmarried if they are single, divorced, or legally separated. A married person can be “considered unmarried” if they file a separate tax return, paid more than half the cost of keeping up their home, and their spouse did not live in the home during the last six months of the tax year.
The Home Maintenance Test
The taxpayer must have paid more than half the cost of keeping up a home for the year. This means the individual is the primary source of funds used to maintain the household where they and the qualifying person live.
The Qualifying Person Test
A “qualifying person” must have lived with the taxpayer for more than half the year, though this rule does not apply to a dependent parent. A qualifying person is either a qualifying child or a qualifying relative. A qualifying child includes a son, daughter, stepchild, or foster child. A qualifying relative can include a parent, grandparent, or sibling, provided they meet specific IRS dependency rules.
Documenting the Cost of Keeping Up a Home
To prove they paid more than 50% of household maintenance costs, a taxpayer must provide documentation. The IRS considers the following to be costs of keeping up a home:
- Rent or mortgage interest
- Real estate taxes and homeowner’s or renter’s insurance
- Utilities, such as electricity and gas
- Home repairs and maintenance
- Food eaten within the home
Expenses like clothing, education, medical treatments, and transportation are not considered costs of keeping up the home.
To prove these expenditures, taxpayers should retain documents such as mortgage interest statements (Form 1098), lease agreements, canceled checks, utility bills, and bank or credit card statements. Calculating the 50% threshold requires summing the total qualifying costs paid by everyone in the household. The taxpayer must then document that their personal contribution exceeded half of that total. For example, if a home’s total maintenance cost was $30,000, the taxpayer must prove they paid more than $15,000.
Establishing a Qualifying Person’s Residency
The taxpayer must prove that a qualifying person lived with them for more than half of the year (more than 183 days). The IRS allows for temporary absences for school, vacation, military service, or medical treatment, with the understanding that the person will return.
Official documents that link the qualifying person to the taxpayer’s address are required for proof. School records, such as enrollment forms or report cards that list the taxpayer’s address, are strong evidence. Medical records from a doctor or hospital showing the address, or official letters from government agencies, can also serve as proof.
Other acceptable documents include lease agreements naming the qualifying person as an occupant or relevant court records. It is best to have multiple forms of documentation from third-party sources to corroborate the residency claim.
Special Rule for a Dependent Parent
An exception to the residency rule applies to a taxpayer’s dependent parent. The parent does not need to live with the taxpayer, but the taxpayer must claim the parent as a dependent. The taxpayer must also have paid more than half the cost of keeping up the parent’s separate home for the entire year, which can include a rest home. Documentation includes proof of the parent’s household costs and the taxpayer’s canceled checks or bank statements showing the payments.
Responding to an IRS Inquiry
An IRS inquiry about Head of Household status usually begins with a letter, such as a CP75A notice, informing the taxpayer of an audit. The notice specifies what documentation is needed and provides a response deadline, often 30 days. A prompt response is necessary to avoid penalties or denial of the filing status.
The notice may include Form 886-H-HOH, “Supporting Documents for Head of Household,” which acts as a checklist for the evidence needed to prove each of the three tests. When responding, gather the required documents and send only photocopies to the IRS; never mail originals. The completed Form 886-H-HOH and supporting evidence should be sent to the address or fax number in the letter, preferably by certified mail for proof of submission.
After the response is submitted, the IRS will review the documentation and issue a determination. This could be an acceptance of the Head of Household filing status, a request for additional information if the documents are insufficient, or a denial if the taxpayer fails to meet the requirements. If the status is denied, the IRS will recalculate the tax liability using the Single filing status, which results in a higher tax bill.