My unmarried granddaughter gave birth on August 31st. Will she be a head-of-household when she files her 2018 tax return? It's the "more than one-half of such taxable year" that worries me.
"2 (b) 1 (A) maintains as his home a household which constitutes for more than one-half of such taxable year the principal place of abode, as a member of such household, of (i) a qualifying child"
It's more than half the child's tax year.
Google is your friend.
From:
Yes, if your child was born alive during the year and the tests for claiming your child as a dependent are met, you may claim her as a dependent. You may also be entitled to claim:
The child tax credit (CTC) and/or additional child tax credit (ACTC) Head of household filing status The earned income credit (EIC)
From IRS Form 1040 instructions:
If the person meets all other requirements to be your qualifying child but was born or died in 2017, the person is considered to have lived with you for more than half of 2017 if your home was this person's home for more than half the time he or she was alive in 2017.
Ahhhh. I was miss-interpreting the "taxable year" to be the calendar year. So the "taxable year" is the intersection of (A) the calendar year and (B) the time the child was alive; in this case the taxable year is only 123 days long (assuming he lives to 2019) from 31-AUG-18 to 31-DEC-18.
Isn't the alternative the right way to analyze this?:
(B) maintains a household which constitutes for such taxable year the principal place of abode of the father or mother of the taxpayer, if the taxpayer is entitled to a deduction for the taxable year for such father or mother under section 151.
(even though for the next ten years the deduction is zero under section
151).
Under section 2(b) a child qualifies if he has been a part of the household for more than half HIS tax year, not the household's tax year.
I see SUCH taxable year (the head of householder's), not HIS (the child's). What are you reading?
Running the mother's situation thru the IRS's "Filing Status Calculator" at
Answering yes, along with other answers ie unmarried, etc results in HOH as filing status.
Yes, we know that. But the question is which section of the law reads on that issue.
The IRS finally got around to this when in early 2017 they withdrew the outdated proposed rules that had never been updated after Congress created the uniform definition of a qualifying child (2004 statute). A new set of proposed rules replaced them to provide guidance on dependency exemptions. See Proposed Regulation, REG-137604-07, 2017-7 I.R.B. 920
Buried in there is this statement:
(4) Birth, death, adoption, or placement. If an individual is a member of a household for less than a taxable year as a result of the individual?s birth, death, adoption, or placement with a taxpayer for adoption or in foster care during that year, the requirement that the individual be a member of the household for more than one-half of the taxable year is satisfied if the individual is a member of the household for more than one-half of the period after the individual?s birth, adoption, or placement for adoption or in foster care or before the individual?s death.
Also buried in there is clarification of what is a temporary absence which also addresses births.
(2) Temporary absence . The taxpayer and an individual have the same principal place of abode despite a temporary absence by either person because of special circumstances. An absence is temporary if the person would have resided at the place of abode but for the absence and, under the facts and circumstances, it is reasonable to assume that the person will return to reside at the place of abode. An individual who does not reside with the taxpayer because of a temporary absence is treated as residing with the taxpayer. For example, a nonpermanent failure to occupy the abode by reason of illness, education, business, vacation, military service, institutionalized care for a child who is totally and permanently disabled (as defined in section 22(e)(3)), or incarceration may be treated as a temporary absence because of special circumstances. If an infant must remain in a hospital for a period of time after birth and would have resided with the taxpayer during that period but for the hospitalization, the infant is treated as having the same principal place of abode as the taxpayer during the period of hospitalization.
My post provided the reference from the explanation... here is the actual wording in the regulation:
(d) Residence for a portion of a taxable year because of special circumstances? (1) Individual who is born or dies during the year. If an individual is born or dies during a taxpayer?s taxable year, the residency test for a qualifying child is treated as met if the taxpayer and the individual have the same principal place of abode for more than one-half of the portion of the taxable year during which the individual is alive. If an individual is born or dies during a taxpayer?s taxable year, the relationship test for a qualifying relative who is a member of the taxpayer?s household is treated as met if the taxpayer and the individual have the same principal place of abode for the entire portion of the taxable year during which the individual is alive.
Thanks. I was not arguing against this, I just didn't read it in the statute.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.