March 1, 1998

The Marriage Penalty

Claire Hintz

Claire Hintz

Download Special Report No. 77

Special Report No. 77

Executive Summary
 Many elements of the tax code vary with marital status, including the amount of the standard deduction, the earned income tax credit, and the tax rate schedule. All of these differences can cause a married couple to have different tax liability that two similarly situated single people.

A married couple filing jointly incurs a “marriage penalty” if their tax bill is higher than the combined tax bills that they would have paid if each could have filed singly. Similarly, a married couple receives a “marriage bonus” when the sum of the individual tax liabilities had they filed singly is greater than their tax liability under a joint return.

Topics

About the Author

Claire Hintz

Related Research

Tackling America’s Debt and Deficit Crisis Requires Social Security and Medicare Reform

Tax Burden on Labor in Europe

The U.S. Tax Burden on Labor Remains below the OECD Average

Testimony: Taxes, Spending, and Addressing the U.S. Debt Crisis

Design Matters When Raising Taxes to Reduce the Deficit and Stabilize the Debt

Minnesota Looks to Raise Taxes despite Projected $17.6 Billion Budgetary Surplus

A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.

A marriage bonus is when a household’s overall tax bill decreases due to a couple marrying and filing taxes jointly. Marriage bonuses typically occur when two individuals with disparate incomes marry. Marriage penalties are also possible.

The standard deduction reduces a taxpayer’s taxable income by a set amount determined by the government. It was nearly doubled for all classes of filers by the 2017 Tax Cuts and Jobs Act as an incentive for taxpayers not to itemize deductions when filing their federal income taxes.

A tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly.