If you file Head of Household with a child who is 23, a student & a dependent can you lose that HOH status if your child earns money? Wondering for Federal & California.

[kgee3]

It seems that California has a $4700 earnings limit but not sure about the limit for Federal taxes.  If for example my college student child earned $5000 would that disqualify me from Head of Household status for both Federal and State taxes? (California being the state).  Thx

[Mike9241]

I'll assume you meet all other qualifications for claiming your son as a qualifying child. here are other requirements - Federal 1040:

1) must be under 24 and a full-time student (any part of 5 months during the year) to be a  qualifying child (QC) 

2) for a QC his income doesn't matter

3) the QC must not provide over 50% of his support.  (doubtful that if his income is only $5K that would be more than 50% of support) 

4) if married then he cannot file a joint return with his spouse unless there is no tax liability but merely filing to get a refund of taxes withheld) 

so for federal purposes, he would qualify you for HOH if all these conditions are met

if California has different conditions, Turbotax will ask about them when you get to the state section. 

you do not report his earned income on your return.

[kgee3]

Thanks - yes they do meet the criteria for a dependent for Federal taxes. I guess my confusion is really with California state income taxes. I can't imagine  that you can file Head of Household for Federal but then have to file as a different status for state but it looks like you do in this instance where the child has earned over $4700. Anybody else ever encounter this? Thx

[Vanessa A]

Is TurboTax telling you this or are you seeing this somewhere else?  That earnings limit is for federal to claim someone as an Other Dependent or Qualifying Relative, not a qualifying child.  If you have a child who is under 24 and still in school full time for at least 5 months out of the year, then this earnings limit does not apply.  They would still count as your Qualifying Child.  There income does not matter.  What matters is if they paid more than  half of their own support for the year.  If they did, then you cannot claim them for federal or state. 

Do you qualify

You must meet all of the following on December 31 of the tax year:

• You were unmarried, considered unmarried, or not in a registered domestic partnership
• You have a qualifying child or relative
• Your qualifying person lived with you for more than 183 days in the year
• You paid more than ½ the costs for maintaining a home
• You were a U.S. citizen or legal resident for the whole year

Qualifying Child

A qualifying child is a person who meets all of the following tests:

• Relationship Test. The person must be one of the relatives listed as follows or a descendant of such a person:
  • Birth child
  • Stepchild
  • Eligible foster child
  • Adopted child
  • Grandchild
  • Brother
  • Sister
  • Half brother
  • Half sister
  • Stepbrother
  • Stepsister
  • Nephew
  • Niece
• Age Test. The person must be under 19 years of age or a full-time student under 24 years of age. The person also meets the age test if he or she is permanently and totally disabled at any time during the calendar year. (If the person does not meet the age test to be a qualifying child, he or she may meet the requirements to be a qualifying relative.)
• Residency Test. The person must live with you for more than half the year.
• Support Test. The person must not have provided more than half of his or her own support.

[kgee3]

I think my confusion may be that for HOH status there's an income limit ($4700) if it's a qualifying relative and no limit if there's a qualifying child. Mine is a qualifying child so I think that it's ok.  It's that a screen pops up asking about the qualifying child's income amount for California state taxes so that's what had me concerned. It appeared that California treated this situation different from Federal.

[ThomasM125]

You are correct, there is no income limit for a qualifying child, that only applies to a qualifying relative. A qualifying child would include a student under the age of 24, assuming he or she qualifies under the other stipulations.

[kgee3]

Thank You so much - super helpful to confirm that. I really appreciate it.

[Adim]

Yes, I am struggling with that too - federally qualified dependent child (student, under 24, more than half support provided by me) with earned income over $4,700. California denies HoH status and demands change in federal status, too. Tried in both TurboTax and Freetaxusa. TurboTax denies it upfront, when enetering dependent information. Freetaxusa denies it at the State return portion. Can't claim two separate HoH statuses - one for Federal and one for state. Should I be filing paper returns??

[kgee3]

For what it's worth... we ended up not claiming the dependent and letting the child (adult really but under 24) file as single. They got a bigger refund and it really didn't affect the parent taxes as much as I'd feared. Each situation is different but that's what we did. It was our last year to claim them anyway so we decided that was the best solution. It's a bit of a kerfuffle IMO.

[MonikaK1]

California law allows taxpayers to claim a dependent exemption credit for each dependent as defined under federal law. The $4700 income limit applies only to children who reach the age of 24 or are over 18 and not enrolled in school full-time, or to other dependents not qualifying children.

Please see this tax tips article for more information on claiming dependents.

In order to claim Head of Household filing status for California, you must meet all of the following on December 31 of the tax year:

• You were unmarried, considered unmarried, or not in a registered domestic partnership
• You have a qualifying child or relative
• Your qualifying person lived with you for more than 183 days in the year
• You paid more than ½ the costs for maintaining a home
• You were a U.S. citizen or legal resident for the whole year

See here for more information from the California FTB.

@Adim  @kgee3 

[Adim]

thank you, I would think so but both TurboTax and FreeTaxUsa made it impossible to claim that HoH status once Thank you, I would think so but both Turbo Tax and Free Tax Usa made it impossible to claim the HoH status once I entered my dependent's income over $4,700 ! Then I switched to H&R free version and boom, no problem. How is this possible?