Does IBR Include Spouse Income? What Married Borrowers Need to Know

Yes, the Income-Based Repayment (IBR) includes your spouse’s income if you file taxes jointly. If you file separately, only your income is considered.

Your tax filing status determines whether spousal income is factored into your payment calculation—and it can impact more than just your monthly student loan payments.

Want to know how filing status affects your IBR payments and eligibility? We’ve got the answers in this guide.

Curious about how spousal income impacts other Income-driven Repayment plans? Check out our guide on How Spousal Income Affects IDR Plans.

Your tax filing status—married filing jointly or married filing separately—makes a big difference in how much you pay each month under the IBR plan. Here’s how it works:

• Filing Jointly: Your loan servicer uses your combined income after deductions (Adjusted Gross Income or AGI) to calculate your payment. Your payment may be higher, especially if your spouse earns more or doesn’t have student loans. But, it increases your family size, which may help you qualify for IBR by lowering your income relative to poverty guidelines.

• Filing Separately: Only your income is used to calculate your IBR payment. This could lower your payment if your spouse earns a lot more than you. But, filing separately comes with trade-offs, like losing certain tax benefits (e.g., student loan interest deduction or Earned Income Tax Credit).

The student loan interest deduction can only apply if you file jointly and might be able to deduct up to $2,500 of interest paid during the year. Check out our guide on Filing Taxes With Student Loans.

To estimate your payments, you can use the loan simulator tool on studentaid.gov or try our free IBR calculator to see what works for your situation.

Let’s look at a few real-life examples to see how this plays out:

• Scenario 1 – High Earners Filing Separately: Jordan and Taylor are married. Jordan earns $120,000 and has student loans. Taylor earns $90,000 but doesn’t have loans. Filing separately allows Jordan to exclude Taylor’s income, lowering their payment. But they’ll miss out on tax benefits, like the Earned Income Tax Credit.

• Scenario 2 – High Earner with Stay-at-Home Spouse: Alex earns $80,000, while Jamie is a stay-at-home parent with no income. Filing jointly increases their family size, which lowers their discretionary income and helps Alex qualify for IBR. Filing separately wouldn’t make much difference in payments but would sacrifice joint filing benefits.

• Scenario 3 – Dual Borrowers with Low Incomes: Chris and Morgan both earn $40,000 and have student loans. Filing jointly combines their incomes and loan balances, leading to lower monthly payments under IBR compared to filing separately, where only individual incomes and loans are considered.

Living in a community property state complicates things if you’re filing separately. In these states, half your spouse’s income might still be included in your IBR calculations.

That’s because community property laws require shared income reporting.

The nine community property states are:

• Arizona

• California

• Idaho

• Louisiana

• Nevada

• New Mexico

• Texas

• Washington

• Wisconsin

If this applies to you, your loan servicer may need extra paperwork, like alternative income certification forms, to exclude your spouse’s income. Getting advice from a tax professional who knows these rules can save you a headache.

If you’re moving from the SAVE plan to IBR, you must prove partial financial hardship. Your payment under the 10-Year Standard Plan has to exceed 15% of your discretionary income.

Here’s how your tax filing status can help:

• Filing Jointly: Increases your family size, lowering your discretionary income and making it easier to qualify.

• Filing Separately: Excludes your spouse’s income, which can also make you eligible.

Pro Tip: Timing is key. File separately to set your IBR payment, then amend your return to file jointly and get tax benefits back. It’s a bit of a juggling act, but it can work if done carefully.

If you’re looking for a complete guide to switching from SAVE to IBR, check out our in-depth article on How to Switch From SAVE to IBR.

If you want lower IBR payments while avoiding the tax impact of filing separately, some married borrowers use this workaround:

• File Separately: Start by filing taxes as “married filing separately” to exclude your spouse’s income from your IBR calculation. This lowers your reported income, reducing your leftover income and monthly payment amount.

• Amend Later: After your IBR payment is set, amend your tax return to “married filing jointly.” This restores access to tax benefits like the Earned Income Tax Credit or student loan interest deduction that are unavailable when filing separately.

This workaround, which was discussed by Wall Street Journal tax reporter Laura Sanders, requires careful timing before you recertify or submit your IDR application and file or amend your return.

You must ensure your servicer calculates your IBR payment before amending your return, as the filing status you use for your tax return determines how spousal income is factored into the payment calculation.

If this workaround feels overwhelming, our one-on-one consultations can guide you through it, align your repayment plan with your needs, and check your eligibility for forgiveness programs.

IBR includes your spouse’s income if you file taxes jointly, which could raise your payment. Filing separately can exclude their income and lower your payment, but it may also mean losing valuable tax benefits.

This decision can feel complicated, but you don’t have to handle it alone. Our student loan experts can guide you through the trade-offs, helping you create a repayment plan that fits your goals and financial needs.

Struggling with student loans? Reach out to us today to explore your options and get the support you need.

Related reading:

• Am I Responsible for My Spouse’s Student Loan Debt?

• Can My Spouse’s Wages Be Garnished For My Student Loans?

• How Does Married Filing Separately Affect Student Loans?

• How to Separate Your Joint Spousal Consolidation Loan

• Student Loans & Divorce: All Your Questions, Answered