Skip to main content
Find a Lawyer
Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

Marriage Tax Penalty

For decades, the federal tax code taxed married couples who filed jointly when both spouses worked at a higher rate than if they had both filed their tax returns as unmarried individuals. This became known as the "marriage tax penalty." Many viewed it as unfairly punishing dual-income married couples and as a disincentive for getting married. But, Congress addressed the problem by enacting the Tax Cuts and Jobs Act (TCJA) in 2017. That legislation reduced or eliminated the penalty for taxpayers who aren't in the highest income tax brackets.

Some taxpayers may enjoy a "marriage bonus" built into the U.S. tax code. The marriage bonus happens when one person who earns little to no income marries a high-income person. The tax rate on the combined income of the couple filing together will usually be less than the higher earner's if they filed separate returns. Even if the lower-income spouse pays taxes at a higher rate, the higher-income spouse's reduced tax bill outweighs the lower earner's tax liability.

History of the Marriage Tax Penalty

The Internal Revenue Service often gets blamed for any perceived problems and unfairness in the U.S. tax code. But Congress sets the formula used to calculate the tax brackets. The IRS only adjusts them each year for inflation.

Before 1948, the U.S. only had one tax bracket that applied to all taxpayers, regardless of filing status. This meant married taxpayers and individual taxpayers paid taxes at the same rate. But in 1948, Congress established separate tax brackets for taxpayers who filed as individuals and married people who filed a joint return. Initially, the brackets for joint filers were double that for single filers. For example, if an individual paid taxes at 10% on their first $25,000 in income, a married couple would pay taxes at 10% on their first $50,000 in income.

In 1969, Congress addressed what it believed was a disparity between individual taxpayers and those filing as head of household (generally, individuals with dependents) and married taxpayers. To correct this disparity, Congress widened the tax brackets for single taxpayers while keeping them the same for married taxpayers. To continue the example above, after the change, an individual taxpayer would pay 10% tax on the first $40,000 in income (instead of on the first $25,000), whereas the married taxpayer would still pay 10% on their first $50,000 in income.

Congress viewed it as a tax cut for individual taxpayers who may have family obligations, not an increase for married taxpayers. But, people eventually saw it as a penalty for married taxpayers who paid more than two single taxpayers on the same income.

TCJA Reduces Impact of Penalty

The tax reform implemented through the TCJA equalized many of the tax rates by making most of the brackets for married taxpayers twice those for single taxpayers. So, married couples filing jointly pay taxes at the same rate as they would have had both spouses filed individually. But, the penalty remains for individuals in the higher tax brackets.

While it adjusted tax rates, the TCJA did not entirely equalize the tax bills of married taxpayers and their single counterparts. Two individual taxpayers could claim some tax benefits that a couple filing a joint return could only claim once. For example, an unmarried couple would each be able to claim up to $10,000 in itemized tax deductions for state and local taxes. In contrast, an itemizing married couple is only entitled to a single $10,000 deduction. Another deduction where there is a penalty is in the deduction for mortgage interest, which is the same regardless of whether you file as married, single, or a head of household.

What About Filing Separately?

Married taxpayers can always file returns claiming the married filing separate tax status. This will allow both spouses to pay taxes as individuals, but the disadvantages usually outweigh any advantages. That's because some tax benefits are unavailable to couples who file separately.

State Marriage Tax Penalties

The federal income tax is not the only tax with a marriage penalty. The penalty can affect your state taxes. The Tax Foundation reports that 16 states have a marriage penalty written into their state income tax codes:

  • California
  • Georgia
  • Maryland
  • Minnesota
  • New Mexico
  • New Jersey
  • New York
  • North Dakota
  • Ohio
  • Oklahoma
  • Rhode Island
  • South Carolina
  • Vermont
  • Virginia
  • Wisconsin

Still Have Questions? A Lawyer Can Help

While the 2017 changes to U.S. tax law significantly reduced the marriage penalty for many U.S. taxpayers, it remains in place for the highest tax brackets. Also, if you plan to claim deductible expenses, the marriage penalty could still impact you. If the tax implications of the marriage penalty concern you, a local tax lawyer can help. A tax attorney can help you prepare your returns in a manner that reduces your tax bill and structure your finances to reduce your state and federal tax bills.

Was this helpful?

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

Or contact an attorney near you:

Next Steps

Contact a qualified tax attorney to help you navigate your federal and/or state tax issues.

Begin typing to search, use arrow keys to navigate, use enter to select

Help Me Find a Do-It-Yourself Solution

Copied to clipboard

Find a Lawyer

More Options