Why It Matters

A recent Congressional Research Service report on marriage penalties and bonuses in the federal tax code examines a structural trade-off in tax policy. A progressive income tax cannot simultaneously provide horizontal equity among households with the same income and family size while remaining fully neutral toward marriage. The federal income tax generally prioritizes progressivity and similar treatment of comparable households, resulting in marriage penalties for some couples and bonuses for others.

Treasury Department estimates for tax year 2023 found that 37% of married joint filers paid higher taxes because they were married, while 53% paid less and about 10% experienced neither a penalty nor a bonus. The average marriage penalty was $1,820, while the average bonus was $4,911. Marriage penalties are most common among couples with children and two-earner households, while bonuses are more common among one-earner households and childless couples.

The Big Picture

Marriage penalties and bonuses emerge from several major provisions of the tax code. Head of household filing status, the Earned Income Tax Credit and the state and local tax deduction cap frequently produce penalties. The standard deduction, marginal tax brackets and Affordable Care Act premium tax credits are more likely to generate bonuses.

For some middle-income couples with children, the combination of losing head of household filing status and receiving smaller EITC benefits can produce substantial penalties. The report provides an example involving two unmarried parents who each have one child and earn $25,000. If they marry, their annual federal income tax burden increases by $5,931, equivalent to 11.9% of their combined pretax income.

The landscape shifted after the One Big Beautiful Bill Act, P.L. 119-21, was signed into law on July 4, 2025. The law temporarily increased the SALT deduction cap. For tax year 2026, the cap is $40,400 for most filers and $20,200 for married couples filing separately. Two unmarried individuals can therefore deduct as much as $80,800 combined, while the same couple could deduct no more than $40,400 after marrying and filing jointly. The cap increases by 1% annually through 2029 before reverting to $10,000 for most taxpayers in 2030 under current law.

P.L. 119-21 also created a temporary $6,000 deduction for taxpayers age 65 and older for tax years 2025 through 2028. The deduction generally creates marriage bonuses because two eligible married seniors may deduct as much as $12,000, although its income phaseout can create penalties when a lower-income senior marries a higher-income spouse.

A temporary deduction for qualified tip income can also create a marriage penalty. The deduction is capped at $25,000 per return through 2029 regardless of filing status, meaning two unmarried tipped workers could potentially deduct more combined income than the same workers after marriage. By contrast, the temporary deduction for interest on qualifying auto loans begins phasing out at $100,000 for individuals and $200,000 for joint filers, which can produce marriage bonuses.

Affordable Care Act premium tax credits can generate both penalties and bonuses, though the report says they are more likely overall to create bonuses. The report cites an estimate that expiration of the enhanced premium tax credits would cause 7.3 million people to lose those credits and 4.8 million to become uninsured.

The Bottom Line

The report identified several options Congress could consider to reduce marriage penalties, including shifting toward individual filing, changing the EITC or SALT cap, adjusting the top marginal tax bracket and creating a second-earner deduction or credit. The report does not recommend a particular approach.

Other countries offer alternative models. Germany allows married couples filing jointly to divide their combined income in half, calculate the tax on that amount and double the result, eliminating marriage penalties while retaining bonuses for couples with unequal incomes. France uses a broader family quotient system that adjusts taxable income according to household size, including additional shares for children.

Research reviewed by CRS suggests that marriage penalties and bonuses have relatively small effects on marriage rates and labor supply. The report says those findings may lead lawmakers considering reform to focus more heavily on questions of fairness and marriage neutrality.

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