Marriage is a personal milestone – but it can also have significant financial consequences when it comes to taxes. While many couples assume that getting married leads to better tax benefits, that’s not always the case. Some couples end up paying more in taxes than they would if they remained single, due to what’s known as the marriage tax penalty.
The marriage tax penalty occurs when a married couple filing jointly pays more in taxes than they would if each person filed as a single taxpayer. This penalty typically affects couples with similar incomes and higher earnings, especially when tax brackets and deductions don’t scale evenly between single and married statuses.
This article explains how the marriage penalty tax works, why it happens, who is most likely to be affected, and the strategies couples can use to minimize its tax impact.
What is the Marriage Tax Penalty?
The marriage tax penalty refers to the additional tax burden some couples face when they marry and file jointly. Essentially, it’s the situation where two people pay more in taxes as a married couple than they would have if they filed as two single individuals.
The penalty is most likely to arise when both spouses earn similar and relatively high incomes. Because the U.S. tax code uses progressive tax brackets, combining incomes can push the couple into a higher tax bracket than they would be in individually.
It’s worth noting that not all married couples face a penalty. Some receive a marriage bonus, especially when one spouse earns significantly more than the other. The tax system in those cases allows for income to be spread across lower brackets, resulting in a lower overall tax bill.
However, when both partners earn similar amounts – particularly if they are high earners – filing jointly can create an unfavorable tax outcome.
2025 Federal Tax Brackets: Single vs. Married Filing Jointly
Understanding how tax brackets differ between filing statuses is essential for calculating potential marriage penalty exposure. The table below shows the 2025 federal income tax brackets for both single filers and married couples filing jointly.
| Tax Rate | Single Filer Income | Married Filing Jointly Income | MFJ Threshold (2x Single?) |
|---|---|---|---|
| 10% | $0 – $11,925 | $0 – $23,850 | Yes (exactly 2x) |
| 12% | $11,926 – $48,475 | $23,851 – $96,950 | Yes (exactly 2x) |
| 22% | $48,476 – $103,350 | $96,951 – $206,700 | Yes (exactly 2x) |
| 24% | $103,351 – $197,300 | $206,701 – $394,600 | Yes (exactly 2x) |
| 32% | $197,301 – $250,525 | $394,601 – $501,050 | Yes (exactly 2x) |
| 35% | $250,526 – $626,350 | $501,051 – $751,600 | No (penalty begins) |
| 37% | Over $626,350 | Over $751,600 | No (penalty zone) |
Notice that the married filing jointly thresholds are exactly double the single filer thresholds through the 32% bracket. The marriage penalty kicks in at the 35% bracket, where the married threshold of $751,600 is less than double the single threshold of $626,350 (which would be $1,252,700). This creates a built-in penalty for high-earning couples.
Causes of the Marriage Tax Penalty
There are several structural reasons in the tax code that create the marriage tax penalty for certain couples:
- Uneven tax bracket thresholds – The tax brackets for married couples are not always double those of single filers. While lower brackets are generally aligned, the top brackets kick in sooner for married couples, causing more income to be taxed at a higher rate.
- Cap on deductions and credits – Certain tax benefits phase out at lower income levels for joint filers than for two single filers combined. This includes deductions for student loan interest, itemized deductions, and education credits.
- AMT and NIIT thresholds – The Alternative Minimum Tax (AMT) and Net Investment Income Tax (NIIT) also have thresholds that are not fully doubled for married couples. This can result in additional tax liability when filing jointly.
- Medicare surtaxes – High-income earners pay an additional 0.9% Medicare surtax on wages and 3.8% on investment income, with income thresholds of $250,000 for married couples – just $125,000 per person – compared to $200,000 for single filers.
- Phaseouts for tax credits – Credits like the Child Tax Credit, Earned Income Tax Credit, and Premium Tax Credit phase out at lower income levels for joint filers than they do when incomes are split across two returns.
These structural issues can combine to create a significant difference in tax liability, especially for dual-income couples earning six figures each.
Which States Have a Marriage Tax Penalty?
The marriage penalty isn’t limited to federal taxes. Many states have their own marriage penalties built into their income tax structures. Currently, 15 states have tax systems that can penalize married couples:
- California – Progressive brackets not doubled for joint filers
- Georgia – Bracket thresholds create penalty for dual earners
- Maryland – Combined local and state taxes can trigger penalties
- Minnesota – High-income brackets not proportionally adjusted
- New Jersey – Tax tables create marriage penalty situations
- New Mexico – Progressive system with unequal bracket scaling
- New York – State and city taxes compound the penalty effect
- North Dakota – Bracket structure disadvantages equal earners
- Ohio – Joint filing thresholds not doubled
- Oklahoma – Progressive brackets create penalty scenarios
- Rhode Island – Tax structure penalizes some married couples
- South Carolina – Bracket thresholds favor single filers
- Vermont – Progressive system with marriage penalty built in
- Virginia – High earners face state-level marriage penalty
- Wisconsin – Bracket structure creates dual-earner penalties
Washington state deserves special mention. While it has no income tax, its new capital gains tax applies a $262,000 threshold for both single and married filers – creating a clear marriage penalty for investment income.
On the other hand, 10 states have structured their tax codes to avoid the marriage penalty entirely by doubling single filer brackets for married couples. Seven states – including Arizona, Louisiana, and Wisconsin – allow married couples to file separately on the same return, which can help avoid state-level penalties while maintaining federal joint filing status.
Examples of Who Is Affected by the Marriage Tax Penalty
The marriage tax penalty does not apply to every couple, but it disproportionately affects certain income levels and employment situations. Here are some examples:
- Two high earners with similar incomes – Imagine two single individuals who each earn $175,000. As single filers, they’re taxed separately. But when they marry and file jointly with a combined income of $350,000, more of their income falls into higher brackets, increasing their overall tax bill.
- Dual-income households with children – A married couple earning a combined $300,000 with two children may lose access to the full Child Tax Credit, which phases out for joint filers starting at $400,000. If they each earned $150,000 and filed separately (as single filers), they might avoid the phaseout entirely.
- Couples paying student loan interest – Single filers can deduct up to $2,500 of student loan interest if their income is below $85,000. For married couples, the deduction phases out starting at $145,000 combined – effectively reducing the benefit for dual-income households.
- High earners with investment income – A couple with combined investment income over $250,000 will be hit with the 3.8% Net Investment Income Tax, even if individually they wouldn’t exceed the threshold as single filers.
Each of these examples highlights how combining incomes can inadvertently trigger new taxes or reduce access to valuable deductions.
Mitigating the Marriage Tax Penalty
While the marriage tax penalty can’t always be eliminated, couples can take steps to reduce its impact through smart tax planning.
- Evaluate filing status options – Most married couples file jointly, but in some cases, married filing separately (MFS) can reduce the tax burden – especially when one spouse has high deductions or student loan repayment is based on individual AGI. However, MFS also disqualifies you from many credits and deductions, so evaluate this option carefully with a tax professional.
- Adjust income timing – If possible, couples can time the receipt of income, bonuses, or capital gains to avoid crossing into higher brackets. For example, deferring income to the following tax year can help reduce the current year’s joint taxable income.
- Max out retirement contributions – Contributing to 401(k) plans, IRAs, and HSAs reduces taxable income and helps manage AGI. This strategy is particularly useful for high earners looking to drop into lower brackets.
- Use tax-efficient investments – Holding investments in tax-advantaged accounts like Roth IRAs or municipal bonds can reduce exposure to the Net Investment Income Tax and other surtaxes.
- Plan charitable giving – Donating appreciated assets, using donor-advised funds, or making qualified charitable distributions (QCDs) from IRAs can help reduce taxable income while supporting causes you care about.
- Monitor credit and deduction phaseouts – Keep an eye on income thresholds for common credits and deductions. Planning ahead can help preserve eligibility or allow you to shift expenses into years when they’re most beneficial.
- Work with a tax advisor – Given the complexity of the tax code and how it affects married couples differently based on income, deductions, and filing status, working with a tax professional is one of the best ways to reduce or manage the penalty.
Frequently Asked Questions About the Marriage Tax Penalty
What is a marriage tax penalty?
A marriage tax penalty occurs when a married couple filing jointly pays more in federal or state income taxes than they would if each spouse filed as a single taxpayer. This happens because tax bracket thresholds, deduction limits, and credit phaseouts for married couples are not always double those of single filers. The penalty most commonly affects couples where both spouses earn similar incomes, particularly at higher income levels.
Does the marriage tax penalty still exist in 2025?
Yes, the marriage tax penalty still exists in 2025. While the Tax Cuts and Jobs Act (TCJA) of 2017 reduced the penalty for many middle-income couples by better aligning tax brackets, high earners still face it. The penalty kicks in at the 35% bracket, where the married filing jointly threshold of $751,600 is significantly less than double the single filer threshold. Additionally, 15 states maintain tax structures that create state-level marriage penalties.
Can I avoid the marriage penalty by filing separately?
Filing as married filing separately (MFS) rarely eliminates the marriage penalty and often makes things worse. MFS disqualifies couples from many valuable tax benefits, including the Earned Income Tax Credit, education credits, and the student loan interest deduction. The MFS tax brackets are also less favorable than single filer brackets. However, MFS can help in specific situations – such as when one spouse has high medical expenses or is on an income-driven student loan repayment plan.
What is the difference between a marriage penalty and a marriage bonus?
A marriage penalty increases your combined tax bill after marriage, while a marriage bonus decreases it. Marriage bonuses typically occur when one spouse earns significantly more than the other. In these cases, filing jointly allows the higher earner’s income to be “split” across lower tax brackets, reducing overall tax liability. Couples with similar incomes – especially high earners – are more likely to face a penalty, while single-earner households often receive a bonus.
Which states have a marriage tax penalty?
Fifteen states have income tax structures that can create marriage penalties: California, Georgia, Maryland, Minnesota, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, Vermont, Virginia, and Wisconsin. Washington state also creates a marriage penalty through its capital gains tax, which applies the same $262,000 threshold regardless of filing status. Seven states allow married couples to file separately on the same state return, which can help avoid state-level penalties.
At what income level does the marriage penalty start?
At the federal level, the marriage penalty begins affecting couples in the 35% tax bracket, which starts at $751,600 for married filing jointly in 2025. However, various credits and deductions phase out at lower income levels. The Child Tax Credit begins phasing out at $400,000 for joint filers (versus $200,000 for single filers), and the $10,000 SALT deduction cap applies per return regardless of filing status – effectively cutting the per-person limit in half for married couples.
How much does the marriage penalty cost?
The cost varies significantly based on income levels, income distribution between spouses, and state of residence. According to Tax Policy Center research, affected couples typically pay an additional $2,000 to $3,000 in federal taxes due to the marriage penalty. High earners in the top brackets can face penalties of $10,000 to $30,000 or more. Couples in states with their own marriage penalties may see additional state tax increases on top of federal penalties.
Does marriage affect the Earned Income Tax Credit?
Yes, marriage significantly affects EITC eligibility and amounts. The EITC has a built-in marriage penalty because income thresholds for married couples are not doubled. For 2025, a single filer with no children can claim the EITC with income up to $18,591, while married couples filing jointly have a threshold of $25,511 – not double. For families with children, the gap is larger: single filers with three children can earn up to $56,838, while married couples are capped at $63,398. This structure can reduce or eliminate the credit when two low-to-moderate earners marry.
Need Assistance with the Marriage Tax Penalty?
The marriage tax penalty is a real and sometimes surprising issue for couples with similar incomes or dual earners in higher brackets. While marriage often brings legal and financial benefits, it can also create new tax challenges when not properly planned for.
Understanding how your income is taxed as a couple – and knowing where your tax brackets, deductions, and credits may change – is key to minimizing the impact of the penalty.
At Dimov Tax, we help married couples work through the tax code with personalized strategies tailored to your income and goals. Whether you’re newly married or planning ahead, our team can help you optimize your tax situation and keep more of what you earn.
Contact Dimov Tax today to develop a smart, penalty-aware tax plan built for your household.