What Tax Breaks Are Afforded to a Qualifying Widow?

The Internal Revenue Service (IRS) offers U.S. tax filers five filing status options to choose from each tax year:

• Single
• Married filing jointly
• Married filing separately
• Head of household
• Qualifying widow(er) with dependent child

The qualifying widow(er) with dependent child status offers several benefits for individuals with a child who have lost a spouse. The tax breaks offered to qualify widow(er)s include a lower tax rate, a higher standard deduction, and some potentially beneficial tax treatment in regard to some investments.

Qualifying Widow(er) Rates and Requirements

The qualifying widow(er) status can be used by a surviving spouse for two subsequent years after a death if they remain single. For the year the death occurred, the widow(er) must use either the married filing jointly status or the filing separately status. The qualifying widow(er) status cannot be used until the subsequent year. In the two years following the death, an individual can choose 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 would apply if a widow(er) remarries in the year of their spouse’s death. Remarriage in the same year as a death would require the widow(er) to file as either married filing jointly with their new spouse or married filing separately. With either, a married filing separately tax return would need to be filed for the deceased spouse.

The 2019 tax rates for married filing jointly and qualifying widow(er) are the same and are included below:

The 2019 tax rates for married filing separately are as follows:

To be eligible to file using the widow(er) status in 2019, an individual must meet the criteria detailed in the IRS’s “Publication 17, Your Federal Income Tax.” The key requirements include the following:

• Spouse’s death occurred in 2018 or 2017 and no remarriage has occurred.
• Must have a dependent child, stepchild, or adopted child.
• An individual 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. For the two years after a death has occurred, an individual filing under widow(er) status must have an income of:

• $24,400 if younger than 65
• $25,700 if older than 65

If income falls below these levels a tax return is not required in most cases but may be beneficial if certain credits are available.

Benefits of the Qualifying Widow(er) Status

The tax benefits for a qualifying widow(er) can be significant. The married filing jointly and qualifying widow(er) tax brackets and rates are the same. In general, this allows the widow(er) to receive married filing jointly rates for two subsequent years following a death if they remain single.

The married filing jointly and widow(er) statuses also offer the highest standard deduction of all the tax statuses. For 2019, the standard deduction for married filing jointly and widow(er) below the age of 65 is $24,400. Over the age of 65, the standard deduction increases by $1,300 to $25,700.

Qualifying widow(er)s can also be eligible for special tax breaks on investments. This may apply to investments owned jointly with a deceased spouse. For one example, if a widow(er) and spouse owned rental property, it 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 step-up in basis 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.”