It may be possible for two people to file head of household in the same house, but there are three IRS rules you need to watch out for.
What does head of household status do?
Head of household status gives lower tax brackets and a larger standard deduction compared to filing as single. In order to qualify, you generally need to have a qualifying dependent.
Head of household status is commonly claimed by single parents and other adults who live with dependent children. You may be able to claim head of household status if you live with multiple adults. In rare cases, two adults in the same home may be able to claim head of household status.
Requirement #1: Separate Households
Each adult who wants to claim head of household status has to have a separate household. The IRS has found that there can be two households within the same physical house.
There usually needs to be some sort of division between the households. For example, each household might have two bedrooms and share the common areas.
If you’re unmarried and sharing a bedroom, it may be more difficult to show that you’re maintaining a separate household.
Requirement #2: Qulifying Dependent
In order to qualify for head of household status, you generally need to have a qualifying dependent. Two people can’t claim the same qualifying dependent.
If you’re unmarried and have two or more children together, you may not be able to divide up your children. The IRS is more likely to say that you only have one household when both people trying to qualify for head of household status are using children they had together.
Two people claiming head of household status in the same house is more common when unrelated families share a home or if you’re sharing a home with other relatives.
Requirement #3: Pay for More Than Half the Cost of Keeping Up the Household
This requirement can get complicated. It can eliminate both people in the same couple from claiming head of household status but half doesn’t always mean half.
The IRS generally counts the following expenses:
- Property taxes
- Mortgage interest
- Rent
- Utility charges
- Upkeep and repairs
- Property insurance
- Food consumed on the premises
The IRS generally does not count the following expenses:
- Clothing
- Education
- Medical treatment
- Vacations
- Life insurance
- Transportation
In addition, household expenses are usually only for each household’s share of the shared home. For example, in an unrelated roommate situation with split expenses, paying 50% of the rent for the home could be considered paying 100% of the rent for your household.
When you’re living with family or as an unmarried couple, the IRS may be more likely to say that there’s only one household and/or to look at what you’re paying as a percentage of the total cost of maintaining the home. However, even if the IRS looks at the total rent or other expenses, the food portion of household expenses could push you over the more than half requirement.
Summary
It is possible for two people living in the same house to file as head of household, but it can be complicated. If you’re living in a roommate situation with each family doing its own thing, it’s often easy to justify.
If you’re living as a blended family, you may want to check with your tax accountant to make sure you can qualify. You may want to do this early in the year rather than waiting until tax filing season so you have time to make adjustments to your living arrangements if you need to.
