Losing a spouse to death is a life-altering event, and it comes with tax ramifications, but the Internal Revenue Service offers special relief to ease some of the financial burden. Surviving spouses can file jointly with their deceased spouses for the tax year in which the spouse died, and then they might be eligible to use the status of qualifying widow(er) with dependent child for the next two years.
The Advantages of Qualifying Widow(er) Status
The qualifying widow(er) status offers two important benefits: The standard deduction amount is the same as that for married couples who file jointly, and as of 2020, the tax brackets are exactly the same as for married couples who file jointly as well.
The standard deduction is the most significant available under the tax code—$24,800 as of the 2020 tax year, the tax return you'll file in 2021. It increased to $25,100 in the 2021 tax year.
Those who are age 65 or older or who are blind can claim an additional $1,300 standard deduction as of the 2020 tax year, the return filed in 2021.
The income spans for tax brackets are very generous, too.
|2020 Federal Income Tax Brackets and Rates for Single Filers, Married Couples Filing Jointly, and Heads of Households|
|Rate||For Single Individuals||For Married Individuals Filing Joint Returns||For Heads of Households|
|10%||Up to $9,875||Up to $19,750||Up to $14,100|
|12%||$9,876 to $40,125||$19,751 to $80,250||$14,101 to $53,700|
|22%||$40,126 to $85,525||$80,251 to $171,050||$53,701 to $85,500|
|24%||$85,526 to $163,300||$171,051 to $326,600||$85,501 to $163,300|
|32%||$163,301 to $207,350||$326,601 to $414,700||$163,301 to $207,350|
|35%||$207,351 to $518,400||$414,701 to $622,050||$207,351 to $518,400|
|37%||$518,401 or more||$622,051 or more||$518,401 or more|
This special filing status provides widows and widowers who qualify with a two-year window to transition from joint filers to their new status as single, unmarried taxpayers.
Five criteria exist for being able to claim this filing status:
- The taxpayer must have been eligible to file a joint return with their spouse for the year during which the spouse died, although a joint return doesn't have to be actually filed. All that matters is that the taxpayer could have done so.
- The taxpayer's spouse must have died during either of the two immediately preceding tax years.
- The taxpayer can't have remarried.
- The taxpayer must maintain a home for at least one dependent child. The child must be a son, daughter, stepson, or stepdaughter by blood or through adoption. This dependent must reside with the taxpayer for the entire tax year except for temporary absences, such as living away at school for a period of time.
- The taxpayer must have paid more than half the cost of maintaining the home for the year.
An Example of the Two-Year Rule
The surviving spouse can file a joint return with their deceased spouse for the 2019 tax year if the death occurred in 2019, assuming the surviving spouse doesn't remarry. The surviving spouse can then file using the qualifying widow(er) status for tax years 2020 and 2021.
The taxpayer would have to use another filing status for tax year 2022 and going forward, such as single, married, or head of household, depending on their circumstances.
Rules for Dependents
The surviving spouse must be eligible to claim their son, daughter, stepson, or stepdaughter as a dependent in each of these qualifying years. Children who are born or who die during the tax year will qualify their parent.
The taxpayer doesn't actually have to claim the child as a dependent but must simply meet the rules to be able to do so.
Foster children aren't included, nor are any other types of dependents, but that doesn't mean a surviving spouse can't claim them as dependents for other tax purposes. And having a foster child or children can later qualify the widow(er) for the head-of-household filing status, which is also beneficial.
Maintaining a Home for Your Dependent Child
The taxpayer must also maintain a home for their son, daughter, stepson, or stepdaughter. Maintaining a home means that the taxpayer has furnished more than half the cost of keeping up the residence during the tax year. Costs of keeping up a home include rent or mortgage payments, property taxes, utilities, and groceries.
The child must reside in the same household with the taxpayer for the entire year except for "temporary" absences. These include absences for hospitalization, education, business, vacation, or military service. These events won't disqualify the taxpayer as long as the child will be returning home after the temporary absence, and if the taxpayer continues to keep up the home during the absence.
In the case of children who are born or who die during the tax year, the parent must have maintained the home for them during the entire portion of the year that they were alive.