Do I Have to Include My Spouse’s Income on My Tax Return?

Filing taxes as a married couple can be confusing, especially when determining whether to report your spouse’s earnings. The answer depends on your filing status and where you live, affecting your tax bill, deductions, and potential refunds.

Filing Status Options

Your filing status determines whether you must include your spouse’s earnings. The IRS offers different options, each affecting tax rates, deductions, and liabilities.

Married Filing Jointly

This is the most common choice for married couples, often leading to lower tax rates and access to more deductions. When filing jointly, both spouses combine their income, deductions, and credits on a single return. The IRS calculates taxes based on total income using joint tax brackets.

Filing jointly may qualify couples for benefits such as the Earned Income Tax Credit (EITC), the Child Tax Credit, and higher IRA deduction limits. However, both spouses share responsibility for any taxes owed, including penalties or audits. If one partner underreports income or claims false deductions, both can be held accountable unless “Innocent Spouse Relief” applies.

If one spouse has past-due debts, such as unpaid student loans or child support, the IRS may use the joint refund to offset these obligations through the Treasury Offset Program.

Married Filing Separately

Some couples file separately to protect themselves from a spouse’s tax liabilities or to maximize deductions tied to individual income, such as medical expenses exceeding 7.5% of adjusted gross income. However, this status often results in a higher overall tax burden.

Many tax benefits are reduced or eliminated when filing separately. Those who choose this option cannot claim the EITC, the student loan interest deduction, or certain education credits. If one spouse itemizes deductions, the other must do the same, even if taking the standard deduction would be more beneficial.

Despite these drawbacks, filing separately can be useful if one spouse faces potential audits or tax debts. It may also help when one spouse has significant deductions that depend on income levels.

Head of Household

Married individuals can only claim this status under specific conditions. To qualify, a person must have lived apart from their spouse for at least the last six months of the tax year and have paid more than half the cost of maintaining a household for a dependent, such as a child or elderly parent.

This status provides lower tax rates than filing separately and a higher standard deduction—$21,900 for 2024, compared to $14,600 for single filers. It also allows eligibility for tax credits unavailable to those filing separately, such as the EITC.

Because this status offers tax advantages, the IRS closely scrutinizes claims. Falsely claiming Head of Household can result in penalties, an audit, and repayment of tax benefits. Keeping clear records of household expenses and living arrangements is essential.

Combining Earnings

How income is reported affects tax brackets, deductions, and overall liability. The IRS uses a progressive tax system, meaning tax rates increase as income rises. Combining two incomes on a joint return may push a couple into a higher bracket, but it can also unlock tax benefits.

Tax brackets for married couples filing jointly are wider than those for single filers, sometimes reducing the impact of higher earnings. For example, in 2024, the 22% tax bracket applies to income between $47,150 and $100,525 for single filers, while for joint filers, it covers income from $94,300 to $201,050. This structure can lower the overall tax burden for couples with unequal incomes, as the lower-earning spouse’s income helps balance out the higher earner’s tax rate.

Certain deductions and credits are tied to total household income. The Child Tax Credit, for instance, begins to phase out at $400,000 for joint filers but at $200,000 for single filers. When incomes are combined, eligibility for such benefits may change, either allowing a couple to claim them or disqualifying them if their earnings exceed the threshold. Additionally, deductions based on income, such as medical expenses exceeding 7.5% of adjusted gross income, may become harder to claim when earnings are pooled.

Community Property States

Where a couple lives affects how income is reported. In nine states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin—community property laws dictate that income earned by either spouse during the marriage is considered jointly owned. This applies to wages, business profits, rental income, and interest or dividends from shared investments.

When filing separately in a community property state, each spouse must report half of the total combined income rather than just their own earnings. For example, if one spouse earns $80,000 and the other makes $20,000, each would report $50,000 on their individual tax returns. This can create complications, especially when one spouse has income sources the other is unaware of, such as freelance work or investments held in separate accounts. The IRS requires accurate reporting, and discrepancies between separate filings can trigger audits or penalties.

Certain exceptions exist. Income from assets owned before marriage, inheritances, and gifts are typically considered separate property. However, if separate assets generate income—such as rental payments from a property owned before marriage—state laws may determine whether that income remains separate or becomes community property. Couples in these states should maintain clear records to distinguish between separate and shared income.

Nonresident or Noncitizen Spouses

Tax reporting becomes more complex when married to a nonresident alien or a noncitizen spouse. The IRS classifies a noncitizen spouse as either a resident alien—meeting the substantial presence or green card test—or a nonresident alien, which changes how income is reported.

If a spouse is a nonresident alien, couples can elect to treat the noncitizen as a resident alien for tax purposes under IRC Section 6013(g). This allows them to file jointly and report worldwide income on a U.S. tax return. While this can provide access to credits such as the Child Tax Credit and standard deduction, it also subjects the noncitizen spouse’s global earnings to U.S. taxation, which may lead to additional tax obligations depending on foreign income and available foreign tax credits.

For those who do not make this election, the nonresident alien spouse is generally not included on the tax return. The U.S. citizen or resident spouse must file as Married Filing Separately or, in rare cases, as Head of Household if they meet the strict criteria. In this scenario, only U.S.-sourced income is reported, and the noncitizen spouse does not need a Taxpayer Identification Number (TIN). However, this approach limits access to certain deductions and credits available only when filing jointly.

Consequences for Omitted Income

Failing to report a spouse’s income, whether intentionally or accidentally, can lead to financial and legal consequences. The IRS cross-references tax returns with employer-reported W-2s and 1099s, meaning discrepancies are often detected through automated systems. If income is omitted, the agency may issue a notice of underreported income, recalculating taxes owed along with interest and potential penalties.

Penalties for underreporting vary based on intent. If the omission is deemed an honest mistake, the IRS typically assesses a 20% accuracy-related penalty on the underpaid tax amount, in addition to interest that accrues from the original due date. However, if the IRS determines that income was deliberately concealed, the penalties become more severe. Fraudulent underreporting can result in a penalty of 75% of the unpaid tax, and in extreme cases, criminal charges may be pursued, leading to fines or imprisonment. Taxpayers who realize they have omitted income should consider filing an amended return using Form 1040-X to correct the error before the IRS initiates an audit or enforcement action.