Marriage Penalties and Bonuses under the Tax Cuts and Jobs Act

Key Findings A marriage penalty or bonus is the change in a couple’s total tax bill as a result of getting married and thus filing their taxes jointly. Marriage bonuses typically occur when two individuals with disparate incomes marry. Marriage penalties occur when two individuals with equal incomes marry; this is true for both high- and low-income couples. Marriage bonuses can be as high as 21 percent of a couple’s income, and marriage penalties can be as high as 12 percent of a couple’s income. While research shows that marriage penalties and bonuses do not have much effect on whether a couple will marry, they do impact how much each spouse works. It is possible to completely eliminate both marriage penalties and bonuses, but it would require a significant overhaul of the tax code that drastically changes the current distribution of income taxes paid. Introduction One unintended feature of the United States’ income tax system is that the combined tax…

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