To clarify, did your sister-in-law meet the other dependent tests - lived with you over six months and earned less than $4,300 last year? She needs to meet these factors as well in order for you to be able to use her to qualify you for Head of Household. You should also verify that she is not on her spouse's tax return either year.
Head of Household - Qualifying Person Rules
Rules for Claiming Qualifying Relatives as Dependents
