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The qualifying widow(er) with dependent child tax filing status offers several tax benefits for individuals with a child who have lost a spouse. The tax breaks include a lower tax rate, a higher standard deduction, and potentially beneficial tax treatment of some investments.
Key Takeaways
- Qualifying widow(er) status is a special tax filing status available to surviving spouses for two years following the year in which their spouse died.
- In general, this status allows a widow(er) with a dependent child to continue receiving the same tax rates for the married filing jointly status for two years following their spouse’s death if they remain single.
- The married filing jointly and qualifying widow(er) statuses have the same applicable tax rates and tax brackets.
- They also have the same standard deduction, which is higher than that for other tax statuses.
Qualifying Widow(er) Requirements and Tax Rates
A surviving spouse with a dependent child can use the qualifying widow(er) status for two years after their spouse’s death if they remain single.
Requirements
For the tax year the death occurred, the widow(er) must use either the married filing jointly status or the married filing separately status. The qualifying widow(er) status cannot be used until the next year. In the two years following the year of death, the widow(er) can choose to use the status that results in the lowest tax payments.
The income of a deceased person is subject to federal income tax in the year of their death. Therefore, the married filing jointly status for the year of death requires income from both spouses.
If the widow(er) chooses to use married filing separately, they should also make tax filing arrangements for their deceased partner. If the deceased spouse is owed a refund for individual income tax, the executor may claim it using IRS Form 1310, Statement of a Person Claiming Refund Due a Deceased Taxpayer.
Special circumstances apply if a widow(er) remarries in the year of their spouse’s death. Such a remarriage requires the widow(er) to file as either, married filing jointly with their new spouse, or married filing separately. With either status, a married filing separately tax return must be filed for the deceased spouse.
Eligibility
To be eligible to file using the widow(er) status, an individual must meet the criteria detailed in the IRS’s “Publication 17, Your Federal Income Tax.” The key requirements include the following:
- The spouse’s death occurred in one of the two years prior to the year of your filing and no remarriage has occurred.
- The widow(er) must have a dependent child, stepchild, or adopted child.
- The widow(er) can show that they were responsible for more than 50% of the expenses of the home in which they and their dependent child lived.
It is also important to be aware of the income thresholds that require a tax filing if an individual chooses to use the qualifying widow(er) status.
If income falls below these levels, a tax return is not required in most cases but may be beneficial if certain credits are available.
Other Benefits of the Qualifying Widow(er) Status
As discussed above, the qualifying widow(er) tax brackets and rates are the same as those for the married couple filing jointly. In general, this allows the widow(er) to receive married filing jointly rates for two years following the death of their spouse if they remain single.
The widow(er) status offers the highest standard deduction of all the tax statuses. Other tax benefits for a qualifying widow(er) can also be significant.
Investment Tax Breaks
Qualifying widow(er)s can also be eligible for special tax breaks on investments. This may apply to investments owned jointly with a now-deceased spouse. For example, if a widow(er) and spouse owned rental property, the property could qualify for a step up in basis for tax purposes.
This could translate into additional depreciation allowances and a lower amount of taxable gains if the property is sold.
The basis step-up also usually applies to other assets, such as stock shares the widow(er) inherits as the beneficiary of a deceased spouse’s estate. Widow(er)s may also see adjustments to the amounts they can contribute to retirement vehicles and adjustments to eligibility for certain tax credits.
For more on filing a Form 1040 with the widow(er) status see also the IRS’s “Publication 17, Your Federal Income Tax.”
What Is the Advantage of Filing as a Qualifying Widow(er)?
The advantage is that for the two years following the year of your spouse’s death, you are eligible for the tax rates and standard deduction enjoyed as a couple filing jointly. The widow(er) can choose the status that results in the lowest tax payments. A qualifying widow(er) may also be eligible for tax breaks on investments, such as for rental properties and inherited stock shares.
Do You Get the Qualified Widow(er) Tax Breaks Without Dependent Children?
No. You cannot claim the qualified widow(er) status if you have no dependent children. Therefore, you are not eligible for the tax breaks that this filing status provides.
What Is the Widow(er)’s Penalty?
The widow(er)’s penalty is a term that describes the financial burdens that a spouse may experience when their spouse dies. When both spouses are alive, they can take advantage of the married filing jointly tax status. But when one spouse passes away, the other spouse’s filing status will change to single. (You can still use the married filing jointly tax status in the year your spouse dies, as long as you don’t remarry that year.)
Let’s say your joint income puts you at the upper end of the 12% tax bracket. If you are suddenly single, your tax bracket could jump to 22%.
In addition, if you are both collecting Social Security, when your spouse dies you only get one check, albeit the higher of the two. The deceased spouse may also have been receiving a pension or annuity that ends or pays less to the surviving spouse, and, for higher-income Medicare beneficiaries, the surviving spouse may wind up paying a higher Medicare premium surtax.
The Bottom Line
The qualifying widow(er) tax filing status allows for tax breaks for two years following the year of the death of a spouse. You have to remain single and you have to have a dependent living at home to qualify for this status.
You may not use the qualifying widow(er) status in the year in which your spouse died. But, in general, it may help you manage your finances as you adjust to your new reality.
