What Credits Do I Lose When Filing Married Filing Separately?

Decide how you and your spouse will file long before the tax deadline.

If you file your taxes separately, you cannot claim certain tax credits for which you may have been eligible if you were filing jointly. For this reason, certain married people choose to file joint returns. However, deciding whether to file joint or separate returns is a decision each couple must make on their own, but knowing what credits you could lose when filing separately can help you make that decision.

Child and Dependent Care Expenses Credit

If you're single, married filing jointly, head of household, or a qualifying widow/widower with a dependent child, you can claim a credit for up to 35 percent of your child or dependent care expenses. However, if you and your spouse file separate returns, you can't get a credit for these expenses.

Earned Income Credit

Working people with low to moderate income levels can claim the Earned Income Credit. The Earned Income Credit is refundable, meaning that it can be given to you as a refund if it's greater than the tax you owe. This credit was designed to offset Social Security taxes while encouraging people to work. However, if you and your spouse file separate returns, you can't claim this credit, and your refund could be lowered significantly.

Education Credits and Adoption Expenses Credit

If you or your spouse are in school or are paying for a child's school expenses, you may be eligible for a tax credit to help you offset your higher education expenses. In addition, couples or individuals who adopt children are generally eligible for an adoption expenses credit that allows them to deduct at least part of the cost of adopting the child. However, married couples who file separately are subject to special requirements.

Reduced Credits

Certain tax credits and deductions are limited over a certain income limit. For example, the amount of the maximum child tax credit and retirement savings contribution credit that you can claim is less when you make more money. When you file a separate return from your spouse, there are lower income limits at which the credits start to be reduced. For example, if a couple is married filing jointly, they would have to make $110,000 together before the child tax credit was reduced. However, if you're married filing separately, your tax credit is reduced if you make more than $55,000.

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