Taxation changes for surviving spouses, but not as much as people think. Still, planning is paramount.

Also called the survivor’s penalty, this common term refers to the increased federal income tax burden (though not a specific tax) a surviving spouse faces after shifting from “married filing jointly” to “single” status. 

Because tax brackets and standard deductions can be less favorable for single filers, the result for the surviving spouse is often higher taxes, even though their total household income has decreased. In some cases, the surviving spouse may also lose certain tax breaks that are only available to married couples, like spousal IRA contributions or higher income limits for certain tax credits. 

The “widow tax” can be particularly challenging for surviving spouses in retirement because required minimum distributions (RMDs) from retirement accounts add to taxable income and can push the surviving spouse into a high bracket. This can disproportionately affect women in the U.S., as they live on average 5.8 years longer than men and, due to historically lower earning power, are more likely to be the lower-earning spouse. 

While there is a tax protection for a “qualifying survival spouse” that allows a widow to continue filing as married, this protection lasts only for up to two years after a spouse’s death, and the surviving spouse must have a dependent child living with them and not remarry during that period of time. 

An example of the widow tax effect: Let’s say a married couple earns $130,000 in 2024 and files jointly in the 22 percent IRS tax bracket for that year, after taking the standard tax deduction. One spouse dies, and the surviving spouse earns only $65,000 (this might include pension income or RMDs from the deceased spouse), yet still remains in the 22 percent tax bracket because the widow must file as a single taxpayer. At the same time, key tax benefits, such as standard deductions, are roughly cut in half, increasing the surviving spouse’s overall tax burden despite lower income.

Jason Fichtner, a fellow of the Stanford Institute for Economic Policy Research and executive director of the LIMRA Retirement Income Institute, recommends people talk to a financial professional, tax attorney or CPA when considering financial planning strategies to reduce tax liabilities. “For example, a financial professional may suggest converting traditional IRAs to Roth IRAs while both spouses are alive and can plan for lower future RMDs, or realizing some capital gains earlier,” he says. “But both of these strategies have up-front tax consequences, which is why it’s important to talk with a financial professional.” 

While Fichtner stresses the importance of planning with professionals, others argue the widow’s tax may not be as burdensome as commonly believed. In a 2023 article “Widow Tax Hit Debunked,” published in the Journal of Financial Planning, Santa Clara University Business Professor Emeritus Edward F. McQuarrie argues that the widow tax is largely overstated and that financial firms often market fears about it to attract clients. Even when taxes go up for a surviving spouse, McQuarrie writes, the actual dollar increase is small relative to income and expenses, estimating that the increase the widowed single pays in income tax and income-related monthly adjustment amount, or IRMAA (the extra charge added to Medicare premiums when a person’s income is above certain levels), is less than 1 percent of the couple’s annual gross income. 

McQuarrie concludes that the greater financial risk usually comes from losing a spouse’s Social Security benefits, not from higher taxes. 

Fichtner says the “widow tax” is a real issue for some as well as “another example of our overly complex tax system that is very confusing to many people, and why so many seek out professional help or tax preparation software to file their tax returns.” 

---

Jessica Korobkin is an undergraduate at Stanford University (class of 2027) majoring in human biology with a concentration in aging population health and nutrition. She also serves as a long-term care ombudsman for the State of California.