Qualifying as head of household for FAFSA® is determined by IRS federal income tax filing status and your parents marital status. Incorrectly filing as head of household is a common error. Other errors include incorrectly accounting for stepparents and stepchildren or explaining special circumstances to the financial aid office.
What is the FAFSA®?
FAFSA® is the key to obtaining student aid. It’s imperative you fill out the form correctly and on time; otherwise, you may be missing out on important financial aid. While it seems straightforward, FAFSA® forms can be confusing. The New York Times estimates that about 25 percent of forms are abandoned during the process every year, resulting in billions of unclaimed dollars.
Who is the “head of household” according to the IRS?
Head of household filing status applies to single or unmarried taxpayers. Tax benefits make this a desirable filing status. However, the IRS mandates you meet certain requirements for head of household:
- Pay for over 50 percent of household expenses
- Be unmarried for the tax year in question
- Have a qualifying dependent or child
Household expenses typically include all bills like mortgage/rent, utilities, insurance, taxes, groceries, and any other expenses that go towards home maintenance.
Being unmarried in the eyes of the IRS means:
- You’ve never been married
- You’re legally separated or divorced
- You’ve lived apart from your spouse for at least the last six months of the tax year
- Your spouse is a non-resident alien and your qualifying child lived with you more than half the year
For dependent qualification, the IRS allows a stepchild, foster, or sibling. The important thing is whether or not this child lived with you for the allotted time in the tax year, is under 19 (non-student) or 24 (full-time student), and the child cannot have paid for more than half of their living expenses.
FAFSA®’s definition of “head of household” is a little different.
FAFSA® treats the head of household definition slightly different. The IRS considers an informal separation as still being legally married, whereas FAFSA® allows for informal separations to be treated as separated status. However, if you claim this, you will likely need to show proof to the financial aid office of the school.
Beware of some potential pitfalls when you fill out your FAFSA®.
If the financial aid administrator determines your FAFSA® head of household status is incorrect, they will require you to fix it. You may be even be required to file an amended tax return, and it could impact your adjusted gross income and potential tax liability. Some common errors with a head of household filing status include:
- Both parents filing head of household with only one dependent, are still married, and/or live in the same house
- Divorced or legally separated parents living in the same home
- Parents are informally separated but living in the same home and one files as head of household with only one qualifying dependent
- Divorced or legally separated parents who live apart and both filed head of household, but children only live with one parent
Other errors include listing a change in marital status that hasn’t happened, like an anticipated divorce. If the parent filing FAFSA® has remarried, the new spouse’s income and assets must be reported as well.
When in doubt, ask for help.
In addition to getting the head of household status correct, it’s important to disclose all unusual circumstances that can affect your ability to pay for college. You can appeal to a college’s financial aid administrator for a judgment review if you have issues like salary reduction, job loss, unreimbursed medical care, or other dependent costs for special needs child or an aging parent.
With a high chance of errors and costly delays, getting assistance filing the FAFSA® form can make a huge difference in getting the maximum financial aid available.
Callahan, Nicole. “12 Common FAFSA® Mistakes.” Homeroom. Department of Education. 25 Sept. 2017. Web. 27 Feb. 2018.
“Tax Guide 2017.” Internal Revenue Service. Department of the Treasury. 2017. Web. 27 Feb. 2018.