Good Morning Gentle Readers,
This is the third, perhaps fourth time that the California Franchise Tax Board has sent my guy a vaguely threatening letter asking him to confirm that he's qualified to claim Head of Household.
You'd think that it would be clear from the first few responses that each subsequent year's claim is clean, particularly since there is nobody else claiming his daughter as a dependent. You'd think they would stop asking him to repeat back to them pretty much the same information that has already been reported to them on the tax return. You'd also think that this diligence in protecting the state's interest would extend to female heads of household. And you'd be wrong. All three times.
Okay, it's not a double blind taste test, but I'm willing to bet a bottle of pretty good cab that there's been less than a handful of female clients that ever showed up at my office with one of these letters. I'm actually thinking there's been exactly one in twenty some odd years, but I could be wrong.
To be fair to the Government Boys, there are a ton of construction workers (read: men) out there paying big child support payments that figure they ought to be entitled to Head of Household since a big chunk of their paycheck is going to support the kids in the ex-spouse's household (Child Support Payments Are Not Deductible Either). There's also people who genuinely misunderstand the rules and the people who like to push the envelope and knowingly snake the Tax Boys.
FOR THE RECORD: The custodial parent is deemed to have provided more than half the support of any minor child.
HEAD OF HOUSEHOLD STATUS IS POPULAR because it incorporates some of the benefit of married/joint tax rates, which are more favorable than single rates. And, since there is only one income, Head of Household status avoids the marriage penalty that zaps many middle class two-earner households.
Here's how it works:
You can claim Head of Household status if you provided a home for certain other persons (dependents) AND if you were unmarried (legally divorced) or legally separated (has to be court ordered) as of December 31 of the tax year if ONE of the following is true for the current tax year:
- You claim one or both of your parents as a dependent and you paid over half the cost of maintaining their home (or they live with you) for the entire year.
- You paid over half the cost of maintaining the home where you lived, and in which at least one of the following people also lived for more than half of the year:
- Your unmarried child, adopted child, grandchild, great-grandchild, or stepchild. The unmarried child does not have to be your dependent.
- Your married child, adopted child, grandchild, great-grandchild, or stepchild. The child must be your dependent unless your married child's other parent claims him or her as a dependent under the special rules applicable to a noncustodial parent.
- Your foster child, who must be your dependent, and must have lived with you all year.
- Any of the relatives listed below, whom you can claim as a dependent:
- Your mother-in-law, father-in-law, daughter-in-law, son-in-law, brother-in-law, or sister-in-law
- Your uncle, aunt, nephew, or niece. These relatives must be blood-related to you. For example, your uncle is blood-related to you if he is either your mother's or father's brother.
Read on for a cool little exception to the rules above. If you are not divorced or legally separated, you may also file as Head of Household if you meet all five of the following conditions:
- You lived apart from your spouse for the last six months of the taxable year.
- You file a separate return from your spouse.
- You paid over half the cost of maintaining your home for the year.
- Your home was the primary home of your child, adopted child, or stepchild for more than half the year, or was the primary home of your foster child for the entire year.
There's a little bit more to all of this, but these are the general rules applicable to Head of Household status.
Clear As Mud?
The Wine Commonsewer