The head of household filing status is available on federal tax returns and some state returns. Most states follow the Head of Household rules established by the Internal Revenue Service, so if you qualify to claim your brother-in-law on your federal return, it’s likely you’ll be able to claim the same status on your state income tax return as well. The head of household filing status offers lower tax rates and increased standard deduction amounts, which reduce the amount of tax charged on your income. If you support your brother-in-law, it’s definitely worth it to see if you qualify to use this filing status.
Before you consider your eligibility to claim your brother-in-law as a dependent, you’ll want to make sure you meet the basic IRS criteria for the head of household status. You can file as head of household if you are legally unmarried, or considered unmarried, on Dec. 31 of the tax year you want to claim your brother-in-law. You must also have a qualifying person, such as a child or other eligible relative, to claim. If you meet these requirements, you’re on the right track. However, you must meet a few more tests before you get the green light to claim your brother-in-law.
The IRS does not require that you have a child to support to use the head of household status. You can use the status if you have a qualifying relative that either lives with you or qualifies to live out of your home and still be your dependent. Your brother-in-law meets the qualifying relative test based on his relation to you and does not have to live with you during the year if he meets other tests for the criteria of qualifying relative. Also, IRS rules for qualifying relatives state that a relationship caused by marriage does not end because of divorce or death. This means you may claim your brother-in-law in any year the tests are met even if he and his spouse divorce or his spouse passes away.
Gross Income Test
The IRS requires any qualifying relative to earn less than a set amount of gross taxable income to meet the gross income test. The maximum amount a qualifying relative can earn and meet this test changes each year but is set at the personal exemption amount. As of the date of publication, the personal exemption amount is $3,700. This means a qualifying relative must have $3,700 or less in taxable income to meet the gross income test. Some types of income are not taxable, such as Social Security income that totals less than $25,000 per year.
The last test your brother-in-law must meet is the financial support test. To claim your brother-in-law as a dependent, you must provide more than half his financial support during the year. Look at his gross income from all sources and determine how much from those funds he used to support himself. If you paid more than that amount, you meet the support test. Types of support include payments for shelter, food, transportation, utilities and medical expenses.