Tax Credits for Married Couples Where One Spouse Owns a Home

It might not necessarily be true that "two can live as cheaply as one," as the old saying goes. But there are financial benefits to marriage and combining income and expenses. It's cheaper to maintain one household rather than two. If one spouse owns a house, there also are federal tax benefits. These might affect state taxes, too, but that will depend on the state. Most states with income taxes, however, either follow federal guidelines or base state taxes on federal returns.

Joint Filing

Mortgage interest on a house can be deducted by married couples even if only one spouse owns the house. Couples have to file joint returns and itemize deductions to qualify, but in most cases you can deduct the entire amount of interest paid on the loan. You also can deduct real estate taxes and mortgage insurance premiums, but not homeowner's insurance or utility payments.

Marriage Rules

You must be legally married and file a joint return to enjoy tax credits. Unmarried couples living together in a house owned by one party can benefit from mortgage deductions, but only on the return of the owning partner. Incomes cannot be combined for a joint return or for deduction of mortgage interest or real estate taxes. You do not have to have been married for the entire year to qualify, so long as you meet the IRS test for joint returns.

Other Marriages

The Internal Revenue Service does not recognize same-sex marriages and there is still legal confusion, even in states where it is allowed, over the status of such marriages. Same-sex partners can apply mortgage interest and tax deductions only if both parties are on the loan. One partner owning a house can claim deductions on that tax return, but the deduction cannot be shared by both partners.

Other Reports

Deductible interest and tax will be reported by the lender on a Form 1098. Any interest paid directly to a seller or third party, and not reported on the 1098, also can be deducted, but needs documentation. You also can deduct expenses for some home improvements, especially if those were financed by loans. But you need to check specific rules for these. You can get answers for most tax questions at

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