Marriage Tax Penalty: Who’s Subject To It? 

Married couple in a kitchen filing with TaxSlayer.

Tying the knot usually benefits the tax return of most Americans, as it enables you to file jointly with your spouse. But sometimes, couples face the marriage tax penalty when the taxes owed while filing jointly exceed the taxes owed if the couple were to remain single filers. The penalty assumes you and your spouse take the standard deduction and report wage-only income.  

Whether you face the marriage tax penalty depends on your financial circumstances. We’ll describe this tax penalty in detail and explain what it means for your taxes in this article.  

What is the marriage tax penalty? 

The marriage tax penalty is an additional tax certain couples face when they file jointly. This tax is dependent on each spouse’s income and ranges from 4% (for couples without dependents) up to 12% (for couples with dependents). The tax penalty goes into effect when couples incur a higher tax rate than they would if they filed separately or stayed single.  

This is because state and federal tax brackets don’t always double the single-income tax rates for couples filing jointly. So, in these cases, the couples would receive a higher standard deduction if they filed separately. This penalty typically kicks in when one spouse makes significantly more than the other or both spouses are high earners.  

The marriage tax penalty applies to federal and certain state tax returns. View the list below to see if your state enforces the marriage tax penalty. 

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

Seven states have a marriage penalty built into their tax brackets, including the states listed below: 

  • Arkansas 
  • Delaware 
  • Iowa 
  • Mississippi 
  • Missouri 
  • Montana 
  • West Virginia 

How to avoid the marriage tax penalty  

You can’t avoid the marriage tax penalty since it’s based on your and your spouse’s tax rates. But the good news is, you can offset some of that penalty. You can do this by itemizing deductions or taking advantage of common deductions like mortgage and student loan interest to save money on your tax bill.  

Certain couples are more likely to be subject to the marriage tax penalty. As mentioned above, spouses with significant income disparities and high earners will likely face the marriage tax penalty. Below are more examples of couples being subject to the marriage tax penalty. 

Low earners with similar incomes 

Most taxpayers with low to moderate incomes qualify for the Earned Income Tax Credit (EITC). For tax year 2023 (returns filed in 2024), the credit amount starts at $600 and increases based on your filing status and number of dependents.  

The marriage penalty kicks in when a low-earner gets married, as this can potentially decrease your EITC amount or disqualify you from claiming the credit altogether. In these situations, couples will have a lower after-tax income if they remain unhitched. 

High earners with similar incomes 

Married couples filing jointly who earned between $693,750 and $1,156,300 (in tax year 2023) will pay higher taxes than they would if they filed separately or stayed single. The 37% federal tax bracket differs for each filing status. 

High earners paying the Medicare surtax 

The Medicare surtax applies to 0.9% of wages, compensation, and self-employed income over $200,000 for single filers and $250,000 for couples filing jointly.  

High earners paying the Net Investment Income (NII) tax 

The NII tax of 3.8% applies to passive income after subtracting investment expenses like interest, brokerage fees, and tax preparation fees. Taxpayers are subject to this tax if their Modified Adjusted Gross Income (MAGI) exceeds $200,000 for single filers and $250,000 for couples filing jointly.  

High earners with long-term capital gains 

Couples filing jointly must pay more taxes on capital gains for investments held longer than a year. As of tax year 2023, the 20% for long-term capital gains starts at $583,750 for couples filing jointly. You can compare this amount to the 20% tax rate for the other filing statuses below. 

Single Married filing separately Head of household 
Over $518,900 Over $276,900 Over $523,050 

Homeowners with large mortgage payments 

Couples filing jointly can deduct up to $750,000 of qualified residence loans. If your mortgage is worth more than that amount, then the remaining debt will be taxed. 

What is the marriage tax bonus? 

Not all couples are subject to the marriage tax penalty. In fact, getting married and filing jointly can benefit you and your spouse’s finances. Sometimes, one of the perks of filing jointly presents itself as the marriage tax bonus. 

The bonus occurs when one spouse makes most or all the income for the household. This bonus kicks in when you choose a filing status. For example, instead of filing as single, filing jointly can put you in a lower tax bracket and qualify you for tax breaks designed for couples.  

Additional tax implications of marriage 

There are other things to consider when filing jointly besides the pros and cons mentioned above.  First, since you are a couple filing jointly, both of you are held liable if something goes wrong with your tax return. You can secure an IRA for an unemployed spouse or mix and match healthcare benefits packages to choose the most valuable benefits between insurance plans (like using your own vision or dental plan with your spouse’s medical plan). 

Do you need help deciding if you should file jointly or separately? Read Married Filing Separately vs. Jointly for more information.  
 

FAQs about the marriage tax penalty

We’ve answered a few questions to help you consider if the marriage penalty is worth taking on.   

Will I pay more in taxes if I get married? 

In most cases, you won’t pay more in taxes since filing jointly comes with one of the largest standard deductions. But if your situation is similar to the examples we’ve provided above, you may be subject to the marriage tax penalty. 

Which states have a marriage tax penalty? 

As of 2024, 15 states have a marriage tax penalty. If your state enforces the marriage tax penalty, visit your state’s department of revenue for more information.  

What is the difference between a marriage penalty and a marriage bonus? 

If you file jointly, the marriage penalty results in extra taxation based on your combined income. On the other hand, the marriage bonus is extra tax breaks depending on your income and filing status.  

Disclaimer:
This article is intended to provide general information to the public and does not provide personalized tax, investment, legal, or business advice. You should seek the assistance of a professional for advice on taxes, investments, and any other financial, legal, or business matter pertinent to your individual situation.