Filing Status

[fukeman]

I am a divorced parent of two children (14yo twins).  I have full custody and receive zero child support and can claim the children as my dependent.  I receive only a retirement income from the military (1099-R). 

I spoke to an IRS help line person who told me that "...since my income is only from my retirement ... that under a new law I do not qualify for earned income or head of household...".  Is this true?

[CatinaT1]

That would be correct.  You have to have earned income to qualify for the Earned Income Credit.  Retirement income is considered unearned income, meaning it was not earned through active employment.

[xmasbaby0]

  If your only income is coming from retirement you do not qualify to get the earned income credit or the child tax credit which are based on receiving income from working.   However, you can file as Head of Household if you have qualifying dependents, and that filing status gives you a higher standard deduction.

Am I Head of Household?

https://ttlc.intuit.com/questions/1894553-do-i-qualify-for-head-of-household

https://ttlc.intuit.com/questions/2900097-what-is-a-qualifying-person-for-head-of-household

If you qualify as Head of Household, when you enter your filing status (single or married filing separately) into MyInfo, and then enter your qualifying dependent, TurboTax will offer HOH as your filing status.

[fukeman]

Would I be able to file as head of household?

[macuser_22]

See the links posted above or this:

Head of Household is for UNMARRIED taxpayers with a related dependent or married and have not lived with their spouse at anytime during the last 6 months of the tax year AND has a child, stepchild or foster child that can be a dependent.
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You may be able to file as head of household if you meet all the following requirements.

1. You are unmarried or “considered unmarried” on the last day of the year.
(You could be considered unmarried if your spouse did not live in your home at any time during the last 6 months of the tax year).
If you were considered married for part of the year and lived in a community property state, special rules may apply in determining your income and expenses. See Publication 555 for more information.

2. You paid more than half the cost of keeping up a home for the year.

3. A “qualifying person” lived with you in the home for more than half the year (except for temporary absences such as school) - a parent does not have to live with you to be a qualifying person.

4. If the qualifying person is your qualifying relative, their gross income must have been less than $4,300 (do not include non taxable Social Security) and you provided more than 1/2 of their support

5. You must be able to claim the dependent for the qualifying person except in the case of divorced or separated parents (that lived apart) and the noncustodial parent is claiming the dependent.

A Qualifying person is either:
A qualifying child or a qualifying closely related relative and meets certain other requirements, however if you are considered unmarried it can only be your child, stepchild, or foster child.

See IRS Publication 501 for more information about who is a qualifying person and a worksheet to determine the cost of keeping up a home.

See IRS Pub 501 for more information
https://www.irs.gov/publications/p501#en_US_2020_publink1000220779