The "penalty" is when the surviving spouse pays more tax on less income after the death of their partner. This occurs when the surviving spouse begins filing as a single filer the year after the death of their spouse.
Following the death of the first spouse, the surviving spouse will likely experience a reduction in income as they lose the income associated with their deceased partner: employment income, social security benefits (the lower of two benefits), and certain pensions and annuities.
Despite the reduction in income, the surviving spouse may also find themselves subject to higher taxes. For those with no qualifying dependents, the surviving spouse must begin filing as a single filer the year following their partner's passing. This means that in 2024, the surviving spouse will hit the 22% bracket at $47,150 in taxable ordinary income rather than the $94,300 threshold they may have been familiar with while filing jointly. The condensed single filer tax brackets subjects more income to higher tax rates, even if the surviving spouse's income decreases.
Caution: To qualify for the Qualifying Widower (QW) filing status, the surviving spouse cannot remarry and must claim a qualifying dependent. For more information, please refer to IRS Publication 4491 - Filing Status, page 8.
2024 Federal Income Tax Rates
| Marginal Tax Rate | Taxable Ordinary Income | |
| Single Filer | Joint Filer | |
| 10% | $0 - $11,600 | $0 - $23,200 |
| 12% | $11,601 - $47,150 | $$23,201 - $94,300 |
| 22% | $47,151 - $100,525 | $94,301 - $201,050 |
| 24% | $100,526 - $191,950 | $201,051 - $383,900 |
| 32% | $191,951 - $243,725 | $383,901 - $487,450 |
| 35% | $243,726 - $609,350 | $487,451 - $731,200 |
| 37% | $609,351+ | $731,201+ |
In addition to higher taxes, the surviving spouse may also incur higher Medicare premium surcharges. Similar to the condensed single filer tax bracket, the single filer Medicare Modified Adjusted Gross Income thresholds are also more condensed. Where premium surcharges would not normally be assessed until Medicare MAGI reaches $206,000 for joint filers, the surviving spouse would now be subject to an increase at $103,000 in MAGI.
Note: Medicare MAGI is defined as AGI + tax-exempt interest.
2022 Medicare Income Related Monthly Adjustment Amount
| 2022 Modified Adjusted Gross Income | 2024 Premium Adjustment | ||
| Single Filer | Joint Filer | Part B | Part D |
| $0 - $103,000 | $0 - $206,000 | 2024 Standard Premium = $174.70 | Your Plan Premium |
| $103,001 - $129,000 | $206,001 - $258,000 | + $69.90 | + $12.20 |
| $129,001 - $161,000 | $258,001 - $322,000 | + $174.70 | + $33.30 |
| $161,001 - $193,000 | $322,001 - $386,000 | + $279.50 | + $53.80 |
| $193,001 - $500,000 | $386,001 - $750,000 | + $384.30 | + $74.20 |
| $500,000+ | $750,000+ | + $419.30 | + $81.00 |
Note: Medicare premiums use a 2 year look back. This means that income reported on 2022 tax returns determine premiums for 2024.
Although there is no strategy to avoid the Widow's Tax Penalty (aside from remarrying), the surviving spouse may be able to take advantage of their final year filing jointly to distribute more income at a lower tax rate.