Marriage is about partnership and commitment. But it can sometimes come with unexpected financial costs—like taxes.
If you’re married, you and your spouse choose whether to file taxes separately as married individuals or file one joint return by combining your incomes. Filing jointly can lower the amount of taxes you owe, commonly called a “marriage bonus.”
But some married couples end up owing more taxes when they file together. This is called a “marriage penalty,” and it typically results when both partners earn similar amounts of income.
TPC research shows that Black couples are more likely than White couples to face a marriage penalty when filing jointly. Here, we outline the factors contributing to these disparities and consider ways to make the tax system more equitable.
What makes a couple likely to receive a marriage penalty or marriage bonus?
Whether a couple filing jointly gets a marriage penalty or bonus depends on their individual incomes. That’s because tax brackets align with total dollars of income reported on a joint return, not the individual amounts of income earned by each of the joint filers. You can see how this works with this calculator.
If partners earn similar amounts, they’re more likely to face a penalty when their combined income pushes them into a higher tax bracket. Conversely, if one partner earns significantly more than the other, they might enjoy a bonus, since joint filing could shift the higher earner’s income into a lower tax bracket.
Why do marriage penalties disproportionately affect Black couples?
Although the federal income tax system does not explicitly consider race, it can create racial disparities. That’s because it does consider characteristics such as income, wealth, and family structure to determine how much people owe in taxes.
Black people have faced long-standing discrimination in the workforce and while trying to access credit, which have led to significant racial income and wealth disparities.
Compared with White couples, members of Black couples are more likely to earn similar incomes, pushing their combined income into a higher tax bracket. Black married couples are more likely to face a marriage penalty than White couples (46 percent versus 43 percent) and less likely to receive a marriage bonus (36 percent versus 43 percent).
Among couples with combined income between $50,000 and $100,000, 59 percent of Black couples faced a penalty compared with 51 percent of White couples. Black couples also, on average, received smaller marriage bonuses and higher marriage penalties.
Black married couples are more likely to have children than White couples, even when they make the same amount of money. This can boost Black couples’ chance of a marriage penalty when filing jointly because of other aspects of the tax code. For example, a Black couple with children might face a marriage penalty filing jointly, compared to a single parent filing as a “head of household” who could be eligible for more tax benefits like the Child Tax Credit or Earned Income Tax Credit.
Understanding these disparities can help policymakers create a more equitable tax system
Broadly speaking, marriage penalties could be eliminated if the tax code allowed married spouses to file as if they were single and never took marital status into account. But that would make the tax code less progressive, create new ways to avoid taxes, and reduce federal and state tax revenue.
Congress could reinstate tax deductions—which reduce the amount of income taxed—for spouses who both work, a policy that existed in the 1980s. These deductions could help reduce penalties, but wealthier couples would be more likely to benefit because deductions are worth more to those in higher tax brackets.
Although correcting the disparities between Black and White married couples will be difficult because the tax code does not explicitly refer to race, identifying these inequities is crucial to ensuring the tax code ultimately promotes fairness for everyone.
