Head of Household

[Myaard54]

My fiancee, her 2 children (10 & 6), and I lived together for the entire year (2023). I provided more than half support for all three of them. My fiancee received a small inheritance (around 16k) from her great grandfathers trust and only worked a couple of days in 2023. We filed each filed an extension because we were waiting for her K1 to arrive for her inheritance. The K1 is only for a few hundred dollars and her W2 is only a couple of hundred dollars, so we believe she is not required to file a tax return of her own. Do I qualify for head of household status if I claim the three as dependents? It doesn't appear the turbo tax program is offering that as a filing status for my situation if so.

[DoninGA]

Since your fiancé and her children are not related to you in any way, you are not eligible for Head of Household filing status when claiming them as your dependents.  Your filing status will be Single.

You would be eligible for receiving the Other Dependent Credit of $500 for each of them on your tax return if they meet all the rules for being a Qualifying Relative.

To be a Qualifying Relative -

1. The person cannot be your qualifying child or the qualifying child of any other taxpayer. A child is not the qualifying child of any other taxpayer if the child's parent (or any other person for whom the child is defined as a qualifying child) is not required to file an income tax return or files an income tax return only to get a refund on income tax withheld.
2. The person either (a) must be related to you or (b) must live with you all year as a member of your household.
3. The person's gross income for the year must be less than $4,700 (social security does not count) in 2023
4. You must provide more than half of the person's total support for the year.
5. The person must be a U.S. citizen or a U.S., Canada, or Mexico resident for some part of the year.
6. The person must not file a joint return with their spouse 

See this TurboTax support FAQ for Head of Household filing status - https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-filing-status/qualify-head-household...

See this TurboTax support FAQ for what is a qualifying person - https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-filing-status/qualifying-person-head...

[Myaard54]

OK. Is my fiancé able to claim the inheritance ($16K) as income in order to file her own tax return and claim her children as dependents? If not, when I claim her we do not have to include any of her other income if it is below the thresholds requiring her to file her own return? 

[DoninGA]

A cash inheritance is not reported on a federal tax return.  If her other taxable income is below the Standard Deduction amount for her filing status she does not need to file a tax return.  Assuming the income she does earn is as an employee that receives a W-2.  If this is Self-Employment income of $400 or more then she is required to file a return.