What Is the Marriage Penalty?

"Marriage penalty" is a term that refers to the additional tax burden that married taxpayers face compared to single filers. Marriage comes with some unavoidable federal and state tax implications.

Federal Level

The 澳洲幸运5官方开奖结果体彩网:Tax Cuts and Jobs Act (TCJA) lessened the impact of the marriage penalty when it took effect in the 2018 tax year. It equalized tax rates for joint married returns with their single counterparts by doubling the income range of the single tax brackets for married couples filing jointly. This is true for all tax brackets except the highest in which the married filing jointly rate begins at less than double the single range.

Before the TCJA, a married couple's income was subject to a penalty of up to 12% if they have children and up to 4% if they don’t. This model assumes that taxpayers use 澳洲幸运5官方开奖结果体彩网:standard deductions and report only wage income.

State Level

A marriage penalty at the state level may be an additional 澳洲幸运5官方开奖结果体彩网:liability that married couples face. This penalty kicks in when married couples file a joint𝓰 tax return. Factors that influence whether a couple will face a marriage penalty include their individual and combined incomes, income disparity, and the number of children they have.

The following 16 states institute a marriage penalty. These states have a marriage penalty because the income tax brackets for 澳洲幸运5官方开奖结果体彩网:married couples filing jointly aren't as large as those for 澳洲幸运5官方开奖结果体彩网:single filers.

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

EITC

Low earners often qualify for the earned income tax credit (EITC). This initiative provides a maximum credit of $8.046 for those with three or more children in the 2024 tax year, up from $7,830 for 2024. The credit depends on income and the number of children the taxpayer can claim as dependents.

The EITC may be reduced or disappear when marriage increases a low-earning partner’s 澳洲幸运5官方开奖结果体彩网:household income. In such cases, a couple may have a lower after-tax income if they marry. The income limits for married taxpayers to qualify for the EITC aren't double those for single taxpayers. In 2024, the income limits are $49,084 for a single taxpayer with one qualifying child and $56,004 for a married couple filing a joint return with one qualifying child.

Additional Taxes

• Medicare: A Medicare surtax of 0.9% applies to wages, compensation, and self-employment income over $200,000 for single taxpayers and $250,000 for married taxpayers.
• Net Investment Income: A 澳洲幸运5官方开奖结果体彩网:net investment income (NII) tax of 3.8% applies to 澳洲幸运5官方开奖结果体彩网:passive income such as interest, dividends, capital gains, and rental income after subtracting investment expenses such as interest, brokerage fees, and tax preparation fees. Like the Medicare surtax, individuals must pay the NIIT if their 澳洲幸运5官方开奖结果体彩网:modified adju🌺sted gross income (MAGI) exceeds $200,000 and they're single or if it exceeds $250,000 and they're married filing jointly.
• Capital Gains: Long-term 澳洲幸运5官方开奖结果体彩网:capital gains on investments held longer than one year is another area in which the 2025 married filing jointly bracket ($751,600) isn't double the single bracket ($626,350). High-earning taxpayers with capital gains experience a marriage penalty compelling them to pay a higher capital gains tax rate of 20% rather than 15%.

Married With a Mortgage

Suppose an unmarried couple bought a home in 2024 and took out a $1,500,000 mortgage. Each taxpayer can deduct the interest on $750,000 of that mortgage debt but they can deduct the interest on only $750,000 of the mortgage debt as a unit if they were married and bought the same house with the same mortgage terms.

Taxpayers can't itemize and claim the standard deduction, too. They should use the option that results in subtracting the most from their income to arrive at their taxable income: their standard deduction or the total of their itemized deductions.

In 2024, the standard deduction for married couples is $29,200 and $14,600 for single filers. It increases to $30,000 for married couples and $15,000 for singles in 2025. The higher dollar amounts create a higher barrier for married couples to overcome before a 澳洲幸运5官方开奖结果体彩网:mortgage interest deduction pays off because their itemized deductions exceed the amount of the standard deduction they're enti💮tled to claim.

Marriage Penalty vs. the Marriage Bonus

Spouses who filed jointly before the passage of the TCJA enjoyed a 20% bonus on their combined marital income if they had children or a 7% bonus if they were childless, according to the Tax Foundation. This bonus commonly kicks in when one partner’s income is substantially higher. Bonuses jumped as high as 21% with the TCJA. Penalties increased to as much as 12% of a couple's income.

The lower-earning spouse’s income doesn’t push the couple into a higher tax bracket when a married couple files jointly. The couple benefits from the wider tax bracket applying to married couples. They may pay taxes at a lower rate as a result. The lower-earning spouse can receive contributions to a spousal IRA courtesy of the higher-earning spouse.

The Bottom Line

Marriage can affect tax implications. Couples should be mindful of the changes they may face and plan accordingly. They may consider consulting with a tax professional if they have questions.