The Income Tax Treatment of Married Couples

The federal income tax system is based on family income. Married couples generally file 

their income tax returns jointly by pooling income and deducting combined allowable expenses. 

Married persons cannot choose single or head of household filing status. While they can use the 

married-filing-separately status, they will usually face a higher tax liability as married-filingseparately than married-filing-jointly. 

The federal income tax system is not marriage neutral with respect to tax liability. A 

couple can pay more or less in federal income taxes depending on whether they are married and 

file a joint return or unmarried and file separate returns. A married couple incurs a marriage 

penalty (bonus) if they pay more (less) in federal income taxes filing jointly than they would if 

they were unmarried and each filed a single or head of household return. It is not possible to 

have a progressive tax system in which married couples with equal statutory income are taxed 

equally without regard to the spouses’ income shares, while at the same time avoiding marriage 

penalties and bonuses. 

Table 1 shows that about 40 percent of non-elderly married tax filers are predicted to 

incur a marriage penalty for an average of $1,927 in 2016 while 51 percent are predicted to incur 

a marriage bonus for an average of $2,698. Only about 9 percent of non-elderly married tax 

filers would pay the same in federal income taxes if they were unmarried and filed separate 

returns. Furthermore, marriage penalty and bonus rates vary by income; penalty rates are lower 

than average for couples with income below $50,000. 

Many factors play a role in affecting marriage penalties and bonuses. Table 2 shows 

marriage penalties and bonuses by the second earner’s share of total earned income. In general, 

couples where only one spouse works or one spouse earns almost all of the family’s income (i.e., 

couples where the second earner’s income share is zero or low) are much more likely to have a 

marriage bonus. In contrast, dual-earner couples where the spouses have similar income shares 

are much more likely to incur a marriage penalty. This is particularly true of higher-income 

couples. Table 3 shows that couples who have children and where the lower-earning spouse 

earns at least 20 percent of the family’s income are much more likely to incur marriage penalties 

than couples without children. This is in part because a number of tax benefits for families with 

children phase out as income increases. (See http://www.treasury.gov/resource-center/taxpolicy/Documents/OTAR-Marginal-and-Average-Tax-Rate-and-Tax-Support-for-Families2015.pdf for details.) 

In addition to marriage non-neutrality, the current tax system creates another source of 

inequality between one-earner and dual-earner couples due to its exclusion of the value of home 

production from the tax base. Dual-earner couples presumably spend less time in home 

production and use after-tax dollars to purchase replacements for goods and services (such as 

child care) that would have been produced at home tax-free if only one spouse worked. As a 

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result, although couples with the same statutory income pay the same amount in taxes, there can 

be an inequality in their economic income reflecting different values of home production. 

Because of child care needs, this inequality between one-earner and two-earner couples is 

expected to increase with the presence of children. 

The federal income tax system is also not marriage neutral with respect to individual 

marginal tax rates. Two otherwise equal persons with the same income can have different 

marginal tax rates if one files jointly and the other files as unmarried. Under joint filing, the 

marginal tax rate is determined by the couple’s combined income. If the couple were unmarried, 

each partner would have the marginal tax rate determined by his or her own income and the tax 

rate schedule for single or head or household status. 

Columns (4)-(6) of Table 4 show the estimated Federal individual income marginal tax 

rates on wages for those who have wage earnings. The lower-wage spouses generally would 

face a lower marginal tax rate if they had filed as unmarried instead of jointly. In contrast, 

depending on the couple’s joint income, higher-wage spouses could face an increase or a 

decrease in the marginal tax rate if they were unmarried and filed a single or head of household 

return. To the extent that second earners’ labor supply is more responsive to changes in tax rates 

than primary earners’ labor supply,1 subjecting both spouses’ earnings to the same marginal tax 

rate under the current system may inefficiently discourage supplying labor to market activities. 

Column (7) and (8) of Table 4 show the estimated Federal individual income tax rates of 

non-working spouses if they decide to work. Under joint filing, the first dollar earned by the 

non-working spouse is taxed at the marginal rate on the couple’s last dollar of income. The 

estimated tax rate over the non-working spouse’s potential wages under joint filing is shown in 

column (7) whereas the tax rate under individual-based filing is shown in column (8).2 Except 

for the lowest income group, non-working spouses face much higher tax rates in the current 

system than they would if they filed individually. To the extent that the decision to work 

responds to changes in after-tax wages, the current system’s higher tax rates, combined with the 

exclusion of home production, can provide a disincentive to work. 

1 The gap in labor supply responsiveness between primary and second earners has significantly diminished since the 

1980s as a result of increased labor force participation for married women.

2 A non-working spouse is assumed to earn the average wage of the second earners within his/her income group, as 

listed in column (3).

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 0 <= 15,000 5% (377) 29% 839 1,817

 15,000 <= 30,000 13% (614) 67% 931 3,575

 30,000 <= 40,000 26% (1,053) 69% 1,270 2,468

 40,000 <= 50,000 37% (1,612) 60% 1,408 2,625

 50,000 <= 60,000 43% (1,572) 52% 1,392 2,822

 60,000 <= 75,000 51% (1,197) 44% 1,577 4,270

 75,000 <= 100,000 49% (948) 48% 2,382 6,698

 100,000 <= 200,000 44% (1,397) 51% 3,312 12,596

Over 200,000 52% (5,665) 47% 7,127 5,063

 

Total 40% (1,927) 51% 2,698 42,232

Notes: 

Analysis is based on married-filing-jointly returns filed by non-elderly couples (both spouses younger than age 65) and excludes non-filers. Couples 

with negative AGI are included in the total line. To compute the tax liability in the single state for married couples with dependents, the model 

assumes the spouse with higher income would meet the household maintenance test and file as a head of household and claim child-related tax 

benefits. The model assumes other individuals would file as single if they were unmarried. 

Couple's Adjusted 

Gross Income ($) % with Penalty

Table 1 

(2016 Income and Law)

Average Penalty ($) % with Bonus Average Bonus 

($)

Number of Couples 

(thousands)

Marriage Penalties and Bonuses

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% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

 0 <= 15,000 2% (426) 18% 414 1,401 9% (82) 70% 344 61 13% (175) 71% 662 64

 15,000 <= 30,000 3% (548) 74% 964 2,276 6% (350) 83% 814 226 10% (593) 75% 479 247

 30,000 <= 40,000 6% (705) 90% 1,463 1,303 7% (589) 92% 1,161 206 25% (454) 70% 518 190

 40,000 <= 50,000 11% (1,208) 88% 1,711 1,103 6% (1,335) 93% 1,338 252 37% (644) 62% 598 263

 50,000 <= 60,000 15% (1,127) 84% 1,741 1,073 12% (938) 87% 1,167 278 42% (627) 56% 601 287

 60,000 <= 75,000 19% (1,310) 80% 1,956 1,383 13% (1,182) 86% 1,353 449 59% (553) 41% 860 431

 75,000 <= 100,000 16% (1,885) 84% 3,394 1,775 12% (1,543) 88% 2,533 641 45% (691) 54% 1,455 613

 100,000 <= 200,000 9% (2,539) 90% 5,466 2,615 7% (2,509) 93% 4,263 1,214 16% (964) 84% 2,031 1,092

Over 200,000 4% (6,158) 94% 8,894 1,421 21% (6,051) 79% 6,447 767 49% (6,406) 51% 2,489 526

 

Total 9% (1,751) 78% 3,446 14,557 11% (3,102) 87% 3,255 4,114 34% (1,840) 64% 1,489 3,726

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

 0 <= 15,000 18% (352) 56% 1,145 71 15% (380) 78% 1,390 108 26% (463) 62% 1,943 113

 15,000 <= 30,000 37% (545) 42% 567 217 37% (509) 51% 1,040 321 51% (800) 38% 1,537 288

 30,000 <= 40,000 73% (797) 24% 521 200 77% (1,207) 21% 398 217 55% (1,438) 34% 1,011 352

 40,000 <= 50,000 78% (1,299) 20% 373 259 75% (1,767) 24% 348 329 71% (2,187) 18% 1,307 419

 50,000 <= 60,000 74% (968) 25% 385 307 78% (1,716) 14% 405 358 79% (2,312) 6% 1,202 518

 60,000 <= 75,000 71% (721) 28% 586 494 82% (1,114) 6% 610 667 82% (1,698) 5% 888 847

 75,000 <= 100,000 65% (843) 34% 1,211 811 72% (894) 27% 759 1,216 77% (836) 14% 513 1,642

 100,000 <= 200,000 43% (1,031) 57% 1,203 1,657 68% (1,326) 29% 776 2,583 74% (1,430) 11% 469 3,436

Over 200,000 80% (5,193) 20% 1,482 653 94% (5,316) 6% 4,643 756 98% (5,898) 1% 16,753 938

 

Total 59% (1,724) 38% 1,068 4,684 72% (1,840) 24% 899 6,572 76% (2,045) 13% 1,051 8,579

Notes: 

Analysis is based on married-filing-jointly returns filed by non-elderly couples (both spouses younger than age 65) and excludes non-filers. Couples with negative AGI are included in the total line. To compute the tax 

liability in the single state for married couples with dependents, the model assumes the spouse with higher income would meet the household maintenance test and file as a head of household and claim child-related 

tax benefits. The model assumes other individuals would file as single if they were unmarried. Earned income used in calculating the income share includes wages and net self-employment income.

Second Earner Share 30-40% Second Earner Share 40-50%

Couple's Adjusted Gross 

Income ($)

Second Earner Share 20-30%

Table 2 

(2016 Income and Law)

Couple's Adjusted Gross 

Income ($)

Second Earner Share 0% Second Earner Share 0-10% Second Earner Share 10-20%

Two-Earner Penalty: Marriage Penalties and Bonuses by Second Earner's Earned Income Share

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% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

 0 <= 30,000 2% (556) 44% 923 2,289 2% (171) 82% 756 185 6% (868) 74% 519 213

 30,000 <= 40,000 5% (881) 90% 1,408 784 7% (692) 91% 1,214 146 25% (491) 69% 430 134

 40,000 <= 50,000 7% (1,107) 91% 1,640 646 5% (1,873) 94% 1,250 157 41% (585) 57% 479 172

 50,000 <= 60,000 10% (953) 88% 1,284 624 9% (888) 89% 931 180 49% (563) 49% 414 175

 60,000 <= 75,000 12% (1,071) 86% 1,369 743 10% (1,053) 89% 934 298 70% (453) 29% 478 294

 75,000 <= 100,000 12% (1,984) 88% 2,988 982 9% (1,119) 90% 2,109 426 59% (496) 40% 862 411

 100,000 <= 200,000 5% (2,810) 95% 5,437 1,482 3% (3,416) 97% 4,181 803 19% (883) 81% 1,884 695

Over 200,000 2% (8,419) 96% 8,455 932 21% (6,433) 79% 6,366 533 51% (6,932) 49% 2,617 321

 

Total 6% (1,757) 78% 3,361 8,586 9% (3,778) 89% 3,111 2,741 39% (1,676) 58% 1,322 2,425

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

 0 <= 30,000 20% (739) 52% 883 178 17% (562) 71% 1,219 314 28% (1,027) 63% 1,685 261

 30,000 <= 40,000 87% (852) 9% 728 135 91% (1,493) 8% 647 138 61% (1,748) 38% 1,289 233

 40,000 <= 50,000 96% (1,357) 3% 507 164 97% (2,174) 3% 764 184 81% (2,682) 18% 1,850 274

 50,000 <= 60,000 92% (1,096) 7% 453 189 97% (2,137) 3% 1,199 203 96% (2,996) 4% 782 296

 60,000 <= 75,000 89% (671) 9% 466 285 94% (1,233) 5% 871 386 95% (2,003) 5% 861 467

 75,000 <= 100,000 90% (791) 10% 481 510 91% (911) 8% 1,100 731 92% (885) 7% 850 967

 100,000 <= 200,000 61% (1,046) 39% 1,228 965 89% (1,540) 11% 1,301 1,556 95% (1,692) 4% 756 2,092

Over 200,000 91% (5,041) 9% 2,530 410 99% (5,723) 1% 34,166 478 99% (6,524) 1% 32,526 587

 

Total 76% (1,646) 21% 1,133 2,845 86% (2,011) 12% 1,460 4,000 89% (2,293) 10% 1,527 5,188

Second Earner Share 30-40% Second Earner Share 40-50%

Couple's Adjusted Gross 

Income ($)

Second Earner Share 20-30%

Table 3 

(2016 Income and Law)

Couple's Adjusted Gross 

Income ($)

Second Earner Share 0% Second Earner Share 0-10% Second Earner Share 10-20%

Two-Earner Penalty: Marriage Penalties and Bonuses for Couples with Children

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% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

 0 <= 30,000 4% (502) 66% 859 1,387 15% (296) 77% 672 102 21% (248) 74% 507 98

 30,000 <= 40,000 8% (559) 90% 1,546 519 7% (316) 93% 1,034 59 27% (373) 72% 722 56

 40,000 <= 50,000 16% (1,275) 83% 1,821 457 8% (807) 92% 1,486 95 29% (799) 71% 782 90

 50,000 <= 60,000 20% (1,250) 79% 2,440 449 17% (988) 83% 1,635 98 32% (776) 68% 816 112

 60,000 <= 75,000 27% (1,434) 73% 2,764 640 18% (1,315) 81% 2,260 151 35% (978) 65% 1,230 137

 75,000 <= 100,000 22% (1,818) 78% 3,960 793 18% (1,979) 82% 3,454 215 16% (2,120) 83% 2,044 202

 100,000 <= 200,000 15% (2,409) 84% 5,509 1,132 14% (2,093) 86% 4,441 411 11% (1,205) 88% 2,267 397

Over 200,000 8% (5,263) 91% 9,784 489 21% (5,161) 79% 6,631 234 45% (5,478) 54% 2,309 205

 

Total 14% (1,748) 77% 3,570 5,971 16% (2,342) 83% 3,563 1,372 24% (2,328) 75% 1,732 1,301

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

% with 

Penalty

Average 

Penalty ($)

% with 

Bonus

Average 

Bonus 

($)

Number of 

Couples 

(000)

 0 <= 30,000 54% (386) 36% 413 110 72% (450) 19% 554 115 73% (539) 11% 1,793 140

 30,000 <= 40,000 42% (553) 55% 453 65 51% (316) 43% 315 79 43% (570) 26% 212 119

 40,000 <= 50,000 49% (1,106) 50% 360 96 47% (709) 51% 320 145 52% (721) 18% 271 146

 50,000 <= 60,000 45% (549) 54% 371 118 54% (729) 28% 292 155 56% (750) 10% 1,414 223

 60,000 <= 75,000 46% (854) 54% 615 208 67% (884) 8% 352 281 66% (1,157) 5% 922 380

 75,000 <= 100,000 23% (1,182) 76% 1,367 301 42% (838) 54% 681 484 56% (722) 23% 358 675

 100,000 <= 200,000 17% (959) 82% 1,187 692 35% (508) 57% 629 1,027 41% (472) 22% 379 1,343

Over 200,000 63% (5,563) 37% 1,046 244 84% (4,491) 15% 1,904 278 95% (4,812) 3% 10,616 352

 

Total 34% (1,996) 65% 1,034 1,839 49% (1,370) 42% 641 2,572 55% (1,430) 17% 625 3,391

Notes: 

Analysis is based on married-filing-jointly returns filed by non-elderly couples (both spouses younger than age 65) and excludes non-filers. Couples with negative AGI are included in the total line. To compute the 

tax liability in the single state for married couples with dependents, the model assumes the spouse with higher income would meet the household maintenance test and file as a head of household and claim childrelated tax benefits. The model assumes other individuals would file as single if they were unmarried. Earned income used in calculating the income share includes wages and net self-employment income.

Second Earner Share 30-40% Second Earner Share 40-50%

Couple's Adjusted Gross 

Income ($)

Second Earner Share 20-30%

Table 3 (continued) 

(2016 Income and Law)

Couple's Adjusted Gross 

Income ($)

Second Earner Share 0% Second Earner Share 0-10% Second Earner Share 10-20%

Two -Earner Penalty: Marriage Penalties and Bonuses for Couples without Children

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Per Couple* Higher-Wage Spouse** Lower-Wage Spouse** Joint Return* Unmarried Return: 

Higher-Wage Spouse** 

Unmarried Return: 

Lower-Wage Spouse** Joint Return Unmarried Return: Non-working Spouse

(1) (2) (3) (4) (5) (6) (7) (8)

 0 <= 15,000 11,620 10,443 5,167 -20.6 -19.3 -2.8 -13.8 -2.3

 15,000 <= 30,000 21,632 19,722 6,371 4.7 6.9 1.0 9.3 -1.6

 30,000 <= 40,000 32,501 28,404 10,085 17.6 17.7 5.2 21.0 -0.3

 40,000 <= 50,000 41,514 34,847 12,930 21.1 19.8 7.4 18.7 2.4

 50,000 <= 60,000 50,256 41,401 15,782 16.2 19.4 9.2 16.5 4.1

 60,000 <= 75,000 60,391 48,645 19,134 15.0 19.5 10.7 15.3 5.7

 75,000 <= 100,000 78,719 60,512 26,224 15.2 21.7 12.5 18.9 9.1

 100,000 <= 200,000 121,606 90,369 41,153 25.5 26.0 17.6 26.6 12.3

Over 200,000 321,586 271,513 74,730 33.0 31.6 22.1 35.2 16.6

 

Total 106,314 84,837 34,637 19.1 21.0 14.1 17.1 5.6

Notes: 

* Average wages and marginal tax rates on wages are computed only if the couple has wages.

** Average wages and marginal tax rates on wages are computed only if the spouse has wages.

***Tax rates are computed assuming the non-working spouse earns the average wage in column (3) for the AGI group. For joint returns, this potential wage is added to the couple's joint income to compute the additional 

taxes.

Table 4 

(2016 Income and Law)

Analysis is based on married-filing-jointly returns filed by non-elderly couples (both spouses younger than age 65) and excludes non-filers. Couples with negative AGI are included in the total line. To compute the tax liability 

in the single state for married couples with dependents, the model assumes the spouse with higher income would meet the household maintenance test and file as a head of household and claim child-related tax benefits. 

The model assumes others would file as single if they were unmarried. The marginal tax rate on a joint return is evaluated at the couple's joint income and the marginal tax rate on an unmarried return is evaluated at each 

spouse's separate income as single or head of household.

Couple's Adjusted 

Gross Income ($)

Average Wages 

($, if wages>0)

Average Marginal Tax Rate on Wages 

(%, if wages>0)

Tax Rate on Non-working Spouses' Wages If 

They Decide to Work*** 

(%, if one-earner couple)

Federal Individual Income Tax Rates of Married Couples

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