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As laws clash, gay parents find tax breaks

Head-of-household filing status not only gives same-sex couples filing as singles a lower tax rate, it also can allow them to take greater advantage of child tax credits than married heterosexuals filing jointly.

If the same-sex couple has two or more children and if both partners file as head of household, they may both be able to get the child credit. But Hartmann warns that the IRS also has been frowning on these kinds of filings recently.

A tax break for same-sex couples who adopt

Gay and lesbian parents who adopt may enjoy an additional tax benefit. When they file their returns for 2012, taxpayers who qualify will be able to claim a credit of up to $12,650 for adoption expenses for each eligible child. However, this credit will begin to phase out when taxpayers' adjusted gross incomes top $189,710.

Married heterosexuals who each make $95,000 and who file jointly would not qualify for the full adoption credit because their combined income of $190,000 is over the limit. But a same-sex couple with similar incomes would qualify because each partner would be below the phaseout level.

In the same way, the single filing status of gay and lesbian parents may help them take greater advantage of education credits than married heterosexuals. These credits support taxpayers who pay for their children's higher education. One such credit, the American opportunity tax credit, provides a tax break of up to $2,500 per child per year.

The special case in 3 western states

Same-sex parents in California, Nevada and Washington need to take extra care with their taxes, Hartmann says.

In 2010, the IRS declared that registered domestic partners and legally married same-sex couples in those three states must split their income evenly. The ruling applies only to California, Nevada and Washington because they are the only states that combine robust community property laws with legal recognition of same-sex couples.

If both members of a couple have to split income 50-50 on their tax returns, then neither spouse can claim to be providing 51 percent of a child's support, which means that neither can file as a head of household, Hartmann says.

At the same time, same-sex couples where one partner stays at home and the other works may be able to see big tax savings because of the IRS ruling, she says.

Gay couples may require expert tax help

The best advice Hartmann and Salandra say they can give to gay and lesbian parents, no matter where they live, is to pay close attention to financial planning and taxes. The laws governing same-sex couples are changing quickly, and IRS rules, such as those governing heads of household, continue to be reinterpreted.

Above all, these experts say, gay couples should do research, seek a knowledgeable tax adviser, and remember that the real world can be a lot tougher than the laugh-a-minute life Mitchell and Cameron face on TV.

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