The widow’s exemption reduces the tax burden on widows by reducing the amount of a widow’s taxable income. States individually determine the widow’s exemption rules and laws for themselves. It is not a federal exemption.
Most commonly, the widow’s exemption effects the state inheritance taxes. When one spouse dies, he or she typically leaves all, or most, of his or her estate to the surviving spouse. The widow is then exempt from paying state inheritance taxes on his or her dead spouse’s estate.
Because it is a state by state exemption it’s important to understand what the laws are in your state. Federal laws don’t regulate what each state can do. If you don’t understand the widow’s exemption in your state, it’s best to talk with a tax professional.
Some states apply the widow’s exemption to property taxes. Florida is one of the states that give widows an exemption from property taxes.
The Widow’s exemption is only available to widows who remain unmarried after his or her spouse dies. This applies to exemptions from inheritance and property taxes. In the eyes of the government, you are no longer a widow when you remarry; therefore, any remarried widows would have to pay taxes.
Widow’s Exemption Scenario
Mindy’s husband passed away six months ago. When Mindy met with her Certified Public Accountant (CPA) after her husband’s death, she learned that she was able to take advantage of tax breaks for widows.
Mindy will still file last year’s taxes as married filing jointly because her husband would still need to pay any taxes owed. However, going forward she can file as widowed, unless she gets remarried.
She can also take advantage of the widow’s exemption. In Mindy’s husband’s will he left his entire estate to her. Mindy isn’t currently working, so she doesn’t have the funds to pay the taxes on the inheritance. With the widow’s exemption she can keep the inheritance to live on without having to pay taxes she can’t afford.