Common-Law Couples: Filing Taxes Jointly

Whether or not unmarried couples can file taxes jointly depends on the laws of the state they live in. In the US, the IRS only allows couples to file joint tax returns if the state they reside in recognizes their relationship as a legal marriage. However, some states do recognize common-law marriages, and in these states, common-law spouses may be able to file taxes jointly. For example, in Colorado, common-law marriages are valid for all purposes and common-law spouses may file jointly if they filed jointly on their federal tax return. On the other hand, some states do not recognize common-law marriages, and in these states, unmarried couples would not be able to file taxes jointly. It is important to note that filing jointly as a common-law married couple may carry certain risks and repercussions in the event of a future separation.

Can common-law couples file taxes together?

Common-law marriage recognition by state

In the United States, common-law marriage, also known as sui juris marriage, informal marriage, marriage by habit and repute, or marriage in fact, is a form of irregular marriage that only survives in a handful of states and the District of Columbia. Some states have abolished common-law marriage but still recognize them if they began before a certain date or for a specific purpose.

As of 2022, common-law marriages are recognized in Colorado, Iowa, Kansas, Montana, Rhode Island, Oklahoma, Texas, and the District of Columbia. Utah and New Hampshire have limited recognition of common-law marriage. The status of common-law marriage in Utah is not clear. Government websites claim that common-law marriage does not exist in Utah, but other legal websites state that "non-matrimonial relationships" may be recognized as marriage within one year of the relationship ending.

Some states that recognize common-law marriage include Alabama, Florida, Georgia, Indiana, Ohio, and Pennsylvania, but only if the marriage was created before a certain date. For example, Alabama recognizes common-law marriage if it was created before January 1, 2017, while Ohio recognizes it if it was created before October 10, 1991.

To be recognized as a common-law marriage, couples must meet the requirements in their state. These requirements can include being old enough to get married (usually 18 years old), having the mental capacity to enter into a marriage, and publicly recognizing the existence of the marriage. Some states also require legal parental consent and consummation.

In terms of filing taxes, common-law spouses may file jointly if they meet the requirements for a common-law marriage in their state and if they filed jointly on their federal tax return. When filing jointly, both spouses become responsible for taxes in full, and they must go through a divorce if they separate, just like any other married couple.

Tax benefits of marriage

In the US, common-law marriage is recognised in some states, such as Colorado and Texas, and not in others. If you are recognised as common-law married by your state, you can file taxes as a married couple.

Now, onto the tax benefits of marriage. Marriage can have a big impact on a couple's financial situation, especially when it comes to filing tax returns and how much tax they pay. There are several tax benefits to being married, including:

Retirement savings advantages

If you're married and filing a joint return, you may be able to contribute to your own Individual Retirement Account (IRA) even if you didn't have taxable earned income that year, as long as your spouse did. This exception, known as the "spousal IRA" rule, doesn't apply to single people.

Federal estate and gift tax benefits

Married couples can leave an unlimited amount of money to their spouses without generating any estate tax. This can protect a wealthy decedent's estate from taxation until the death of the surviving spouse.

Lower tax brackets

In many cases, married couples pay less tax than two similar single people. This is because the income threshold or other dollar amount for joint filers is more than twice the amount for singles.

Double the tax benefits

Sometimes married couples can simply double the impact of a tax benefit by taking it twice—once for each spouse.

Ease of filing

Filing a joint tax return is generally easier and can lead to lower tax bills. It also takes less time and effort to file one tax return than two separate returns.

Tax credits

Married couples filing jointly may qualify for several tax credits they would not have if they filed separately, including the Earned Income Tax Credit, Child and Dependent Care Tax Credit, and American Opportunity and Lifetime Learning Education Tax Credits.

It's important to note that there can also be some tax disadvantages to marriage, and in some cases, low-earning couples could be hit with a "marriage penalty" if they claim the Earned Income Tax Credit.

Social survivor benefits

In the United States, common-law marriages are only recognized in nine states, as well as Washington, D.C. Several other states will recognize common-law marriages if they were established before the practice was abolished in that state.

If a couple meets the requirements of a common-law marriage in a state that recognizes such marriages, they may be eligible for Social Security benefits, including survivor benefits. To be eligible for survivor benefits, the marriage must have lasted at least nine months before the spouse's death. It is important to note that there is no such thing as a "common-law divorce," so if a couple wishes to separate, they must go through a normal divorce process in their state's courts.

Social Security survivor benefits are available to surviving spouses, ex-spouses, minor children, older disabled children, and dependent parents. Stepchildren, grandchildren, and step-grandchildren can also sometimes collect benefits. A surviving spouse generally doesn't qualify for survivor benefits until the age of 60, but they can collect payouts as the caregiver for the deceased's children under the age of 16. Children then qualify for benefits paid to the surviving parent until they turn 18 (or 19 if they are still in school).

The amount of survivor benefit a family gets is based on the deceased worker's average lifetime earnings. The more they earned, the higher the benefit. Benefits are based on how much the deceased would have collected at full retirement age if they were still alive.

Filing jointly vs separately

If you're recognised as common-law married by your state, you can file taxes jointly. This is only a problem for states that don't recognise common-law marriages. Filing jointly can net you a bigger standard deduction, reducing your taxable income. However, when you file a joint tax return, your tax liability becomes "joint and several", meaning you are each responsible for the taxes in full.

On the other hand, couples who file separately typically get fewer tax benefits. Separate tax returns may result in more tax. Couples who file separate returns can't take the student loan interest deduction, and they can't deduct student loan interest either. However, filing separately might help you surpass the IRS's threshold to deduct out-of-pocket medical expenses. That's because the threshold is based on a percentage of your Adjusted Gross Income (AGI), which would be lower if only considering one income.

In summary, while joint filing often leads to more benefits and a lower tax bill, each couple's situation is unique. Weigh the pros and cons to see whether filing together or on your own could put you ahead financially.

Common-law marriage termination

In the United States, common-law marriage is a legal status that exists in only eight states and Washington, D.C. These states are:

• Alabama
• Colorado
• Iowa
• Kansas
• Montana
• Rhode Island
• South Carolina
• Texas
• Utah

Two additional states, Oklahoma and Pennsylvania, recognize common-law marriage after the fact for limited purposes only. New Hampshire recognizes common-law marriage for the purpose of inheritance only.

The law regarding common-law marriage varies from state to state, and most states do not recognize it. However, under common-law marriage rules, there are some commonalities that exist:

• The two people must live together (also known as cohabitation)
• The two people themselves intended their relationship to be a marital one
• The community saw them as a married couple

Some jurisdictions may place additional requirements on a couple claiming a common-law marriage, so the people involved must check the law in the state in which they live. For example, there may be age requirements for entering into a common-law marriage.

If a couple can show a valid common-law marriage, and then the couple moves to a state that does not recognize common-law marriage, the new state would still recognize the marriage.

To terminate a common-law marriage, the couple must go through the same legal procedures as a licensed marriage. That means filing a divorce petition and all other necessary documents with the family court in the state in which the parties live. The legal process is also the same as dissolving a formal marriage. All the same legal issues need to be addressed, such as child custody and child support, spousal support, visitation, and the division of property.

To avoid paying alimony or dividing certain property, one spouse may claim that no common-law marriage has ever existed in the first place.

Frequently asked questions