Filing as two Head of Households for a married couple living and working in separate states.

[ediben11]

If a married couple living and working in separate states. Each parent has one child as dependent, can each parent file as Head of Household in his own state ?  or only one parent can file as HoH the other as Separate return ? My TurboTax 2021 Home and Business is not letting me do it this way. Please help me.

[Bsch4477]

The key is not who claims the dependency but with whom the child lives. If you and your spouse live apart and a child lives with each of you then each of you can file a return as head of household. 

[ediben11]

Thank you for your answer. We have two dependent who are full time students. Each one lived an equal amount of time between the Mom and Dad in two different states. When I try to file a joint return, I end up paying more Tax. That I why I looked at the filing HoH which seems to give a better return with each parent claiming one child out of the two. I'm still married to my Spouse but we live in two different states because of work. Am I doing anything wrong here ?

[Opus 17]

Head of household status is not intended for this purpose, but it may be technically permissible. There are two factors you will need to pay special attention to.  First, the child must not only be the taxpayer‘s dependent, but must live in the taxpayer‘s home for more than half the year in order to be a qualifying person for head of household status.  So the fact that you have two children that you could split is not, by itself, enough.  Child number 1 would have to live in home number 1 for at least 183 nights, and child number 2 would have to live in home number 2 for at least 183 nights.  If you don’t indicate that the child lived in the home more than half the year, TurboTax one award you the status.

secondly, married spouses must spend the entire second half of the tax year living apart.  It’s not clear what would happen if you had a meet up in a hotel in between homes for a rendezvous, but if one spouse visits the home of the other spouse for even one night between July 1 and December 31, that will defeat the head of household status for both spouses.  Head of household status is intended for single parents and for married couples who are separated and on the way to a divorce, and spending the night together in one of the homes defeats the status for both spouses.

[ediben11]

It is not clear for me how this rule of one night together between July 1st and December 31 can break the HoH status. My spouse still has its own home away from me for the full year. We barely visit each other trying to convince each side to give up his job. How does the IRS or State check our visitation log to determine if qualify for HoH status ? 

[Bsch4477]

Tax law for HOH requires that you don’t live together at any time during the last 6 months of the year. Filing as HOH if you don’t meet the requirements means that you are filing a fraudulent return. Can’t be any clearer than that. 

[Opus 17]

The actual regulations say this:

For purposes of subparagraph (1)(iv) of this paragraph, an individual’s spouse is not a member of the household during a taxable year if such household does not constitute such spouse’s place of abode at any time during such year. An individual’s spouse will be considered to be a member of the household during temporary absences from the household due to special circumstances. A nonpermanent failure to occupy such household as his abode by reason of illness, education, business, vacation, or military service shall be considered a mere temporary absence due to special circumstances.

 A “household“ is not simply an apartment, house, or other physical location. Two people living apart might still be considered to be members of the same household depending on their activities and relationship.  If you are reasonably happily married, sharing each other’s company, planning joint family activities like vacations or visiting relatives together, coordinating your children’s schools, and other similar activities, an IRS auditor may consider you to be part of one household, with one spouse temporarily absent due to work.

Most taxpayers are not audited. If you are audited, the burden of proof is on you to prove every deduction, dependent, or other claim that you made on your tax return; the IRS does not have to prove your tax return is incorrect, you have to prove your tax return is correct.  

If you think you can prove that you have two completely separate households, and it is not the case that one of you is temporarily absent due to work but truly creating separate households, you might reasonably succeed in your claim. It’s a risk that you will have to decide to take. Under the circumstances, I think you would be unlikely to succeed, you may wish to hire your own professional expert to review your situation. 

[ediben11]

I dont get how these rule are designed. My spouse does not care about being with me except visiting kids in my house for few days during the year. Spouse does not want to give up his job or apartment in another state. We are married on paper for now until someone will give up or file for official separation.

[NCperson]

@ediben11 - I sense some frustration and friction with the responses you are getting, so let me try in very layman's terms to explain.

MFJ - Married Filing Joint

MFS - Married Filing Separate

HOH - Head of Household

The tax laws are written to support the sactimony of marriage.  Those that are married get the best tax benefits.  So, since you are legally married, you have two choices: file MFJ or MFS.  The IRS doesn't care. Filing MFS isn't as financially beneficial, but you are welcome to do so. (few file MFS because of the financial costs, for example, as you have two collega age children, you lose the educational tax benefits of AOTC and LLC if you file MFS). 

For those that are not married, there are two choices: Single and HOH.  (There is a 5th - QSS, but that is for situations where a spouse recently passed away, so let's not worry about that) 

So are you married or are you not married?  THAT is what is creating the friction here. Are you trying to take advantage of laws set up for those that are not married but you are legally married? all the IRS cares about is that you are 'married on paper'....and you are!

Well, what about those that are legally married, but are trying to go their separate ways? The IRS has rules for that too.  And it begins with "living apart for the last 6 months of the year".  There are no exceptions. So when you state that you live apart but he comes to visit a few times a year, then if he stayed at your home any time in the last 6 months of the year, then you haven't lived apart for the last 6 months of the year (remember, there are no exception!). 

if you can't satisfy this 6 month test,  you are not eligible for HOH. that is the rule and it is that simple. 

 Let's say you can satify the 6 month test.  Can you prove that each child lived with different parents for at least 183 days of the year?  (being away at college is considered temporarily being away from their permanent residence and doesn't impact the number of days the child lived at the permanent residence).  

If I was an IRS auditor, I would want you to show me for each child evidence of their permanent living situations.  1) show me their driver's liscense, what address is listed there? 2) since they are over 18, are they registered to vote and what precinct are they registered in? 3) where do they receive their mail, were any change of address records sent to USPS? 4) do they own cars in their own name? if so, in what state is the car registered? 5)  are they receiving any state sponsored scholarships that require residency in a specific state? 6) do you have a calendar where you marked which nights they spent at your home?  I am sure I can come up with other questions that challenge their permanent residency. 

Then  there is the 'household' requirement.  That was well articulated above.

See where I am going with all this?  Are you trying to swim against the tide? THAT is the friction I sense you are feeling.  

[Opus 17]

@ediben11 

Well stated by @NCperson .

if you are legally married, you can’t use head of household status unless you are “considered unmarried“ due to actual physical separation for at least 6 months.  The IRS can’t read your mind about the emotional status of your marriage, but they can look at where you and your spouse physically spend your time.

Then even if you can show that you are actually physically separated for the required length of time, each spouse would have to have actual physical custody of a different child dependent in order for that child to be a qualifying person for head of household status.

[ediben11]

Thank you for your explanation.  Because I can't prove my spouse never spent a night in my place on the last 6month of the year, then I have to file a joint return for Federal. Can each of spouse file his own state return and claim one dependent on his sate return ?  I think terminating this marriage may have the least headache !

[NCperson]

@ediben11 - depends on the state and the rules for that state.  Can't comment without knowing the two states in question.  

Also, while you stated you will thus file "joint" on federal, if there is no agreement for both to sign the tax return, then it has to be 'Married- Filing Separate".  And based on your last comment, engaging a lawyer before you agree to file in April may be an approach to consider.

Also, while all the commentary has focused on the "6 month rule", if there is a signed legal separation agreement in place that is 'good enough' for the IRS to prove separation, even if the legal separation agreement is signed on Dec. 31.  Then filing HOH (assuming the child lived with you for 183 days or more) becomes a much "easier putt". 

[Opus 17]

@ediben11 

Several points.

First, you can’t file a joint federal return unless both spouses agree.

Second, you must generally file your state tax returns with the same status as your federal tax returns. However, if the two spouses are permanent residents of different states, it is usually possible to file as married filing separately in the two different states after filing a joint federal return. This is somewhat tricky to do in TurboTax and we could advise you further if this is what you decide to do.

Third, it’s generally impossible to ever prove that something didn’t happen. If audited, the IRS is not going to ask for something unreasonable, like photographic evidence that the other half of your bed was empty every single day since July 1 of the year.  If audited, you need to show by reasonably persuasive evidence that you and your spouse have established permanently separate households. In other words, households that are not temporarily separated as discussed in the regulations that I quoted.  You may have other evidence—such as emails or text messages, signing a long term lease, changing voter registration, car registration, and so on—of showing the IRS that your separation is not temporary.

You started this discussion by indicating that you and your spouse were separated for work and that you were trying to convince each other to move. You have now changed your story somewhat to suggest that the marriage is close to ending on account of the job situation. The ultimate question for the IRS, if you are audited, would be whether or not your separation is temporary or permanent. Are you “considered unmarried“ under the definition of the regulation?  Have you lived separate lives since July 1 of the tax year?

It is certainly possible and completely legal for spouses who meet the definition of “considered unmarried“ and who both have different qualifying child dependents, to both file as head of household. You have to determine whether you fit the regulations and requirements.  We can only explain the regulations and offer suggestions, but we don’t know your facts and circumstances as well as you do.

[Hal_Al]

Another issue is the dependent students and their ability to be a qualifying person for Head of Household status, particularly if they are "away at school".  Meeting the 183 day rule is problematic. Living away from home, attending college, is considered a temporary absence from the parent's home.  In the case of separated parents, the  student is normally considred to be still living with the parent he was living prior to going off to college. 

[ediben11]

After filing as HoH I I got hit with large penalty because I missed the deadline while I owe tax to States and Federal. Can I ask the IRS to amend my federal return and  re-file a joint tax ?  is this possible. I'm overwhelmed with this Turbo-Tax  SW.