Eliminate or Modify Head-of-Household Filing Status

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of Dollars 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2023–
Decrease (-) in the Deficit                        
  Eliminate head-of-household filing status -15.0 -22.0 -22.9 -18.5 -17.0 -17.8 -18.5 -19.3 -20.0 -20.8 -95.4 -191.8
  Limit head-of-household filing status to unmarried people with a qualifying child under age 17 -5.2 -7.7 -8.1 -6.8 -6.4 -6.8 -7.1 -7.4 -7.7 -8.0 -34.2 -71.3

Data source: Staff of the Joint Committee on Taxation.

This option would take effect in January 2023.

On their tax returns, people must indicate their filing status (such as married, single, or head of household), which has implications for the amount of taxes they owe. Those who are not married generally file as single or as head of household. People who file as heads of households receive tax preferences that are not available to other unmarried individuals: They are eligible for a larger standard deduction, and lower tax rates apply to a greater share of their income. Moreover, heads of households qualify for some tax preferences at higher levels of income than those who file as single.

To qualify for head-of-household filing status, unmarried people must pay most of the costs of maintaining the household in which they have resided with a qualifying person for more than half of the year. The rules for claiming a qualifying person vary. In addition to meeting certain residency and relationship criteria, a child claimed as a qualifying person must be under the age of 19, under 24 and a full-time student, or permanently and totally disabled. Other dependent relatives, who also must meet residency and relationship criteria, must receive more than half of their support from the head of household and have gross income below a specified amount ($4,400 in calendar year 2022).

This option consists of two alternatives. The first alternative would eliminate the head-of-household filing status. The second alternative would retain that status but limit it to taxpayers who pay more than half of the costs of maintaining the household in which they have resided with a qualifying child under the age of 17.