Fix the marriage penalty
by reducing the income phaseout threshold for the Child Tax Credit to $250,000 for all non-married filing jointly filers.
For income taxes, the marriage penalty
still exists, especially for couples where both partners enjoy high incomes.
On Accounting Today, senior editor Roger Russell, a tax attorney, wrote: "The decision of the IRS to acquiesce opens the door for unmarried couples outside the 9th Circuit to claim the deductions subject to the increased limit, and adds an additional element to the marriage penalty
under the Code.
If enacted, policymakers should at least match the childless worker EITC expansion with a married family expansion and consider additional steps to reduce the overall EITC marriage penalty
Those reforms also seem to have reduced, though they have certainly not eliminated, the marriage penalty
for low-income families, as a single woman now must enter the workforce to receive welfare assistance.
The marriage penalty
was cited in the Association's latest online installment revealing real examples of how real people saved money when purchasing long term care insurance.
Moreover, joint filing causes three significant departures from marriage and couples neutrality: the singles penalty, the marriage penalty
, and the marriage bonus.
Conversely, some couples may be hit with the so-called marriage penalty
when the spouses have similar taxable incomes that, combined, exceed the 15% marginal bracket.
Data reflected a lifetime marriage penalty
Kasprak cautions, however, that high-earning newlyweds may be subject to a marriage penalty
Before the new law extended marriage penalty
protection, couples would have moved from the 15% bracket to the 25% bracket with only $60,550 of taxable income.
The taxpayers argued, in turn, that when Congress used the half limitations for married persons filing separate returns, it intentionally created a marriage penalty
not applicable to co-owners not married to each other.