Attention same-sex married couples: You now can file a joint federal tax return or as married filing separately, regardless of where you live.
This filing option applies to 2012 returns, many of which are pending because the filers got extensions in anticipation of a change in how the law would treat same-sex marriages, as well as some old tax filings.
The Treasury Department and Internal Revenue Service on Thursday announced that same-sex couples who are legally married in one of the 14 jurisdictions that recognize their marriages will be treated as married for federal tax purposes, even if they subsequently move to a state that does not recognize their marriages.
Same-sex couples and their tax advisers have been waiting for this decision since the Supreme Court of the United States decided June 26 that a key portion of the Defense of Marriage Act, or DOMA, was unconstitutional.
DOMA had stated that for federal purposes, only a marriage between a man and a woman was legal. In hearing the Windsor v. United States estate tax case, however, the justices determined that that was constitutionally unfair.
Moves and marriages
Immediate speculation following the Supreme Court ruling was that same-sex couples living in states that recognize their weddings would be treated the same as heterosexual couples when filing federal returns.
But there was uncertainty as to how same-sex married couples who no longer live in one of the 13 states or Washington, D.C., that recognize their marriages would fare when it came to filing federal 1040 forms.
In most cases, Uncle Sam defers to state laws when it comes to a couple’s marital status.
No longer. Thursday’s decision makes all marriages, same-sex or heterosexual, equal under federal tax law nationwide.
No limits on residency
“Today’s ruling provides certainty and clear, coherent tax-filing guidance for all legally married same-sex couples nationwide. It provides access to benefits, responsibilities and protections under federal tax law that all Americans deserve,” said Treasury Secretary Jacob J. Lew in a statement announcing the tax guidance.
“This ruling also assures legally married same-sex couples that they can move freely throughout the country knowing that their federal filing status will not change,” said Lew.
Same-sex married couples now will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling also applies to Internal Revenue Code provisions where marriage is a factor, such as filing status, dependent claims, tax deductions and credits.
“With today’s ruling, committed and loving gay and lesbian married couples will now be treated equally under our nation’s federal tax laws, regardless of the state they call home,” said Chad Griffin, president of the Human Rights Coalition, an advocacy group for lesbian, gay, bisexual and transgender rights. “These families finally have access to crucial tax benefits and protections previously denied to them under the discriminatory Defense of Marriage Act.”
Amended returns accepted
Today’s tax guidance also means same-sex married couples are able to file amended tax returns for the previous three tax years — that is, 2010, 2011 and 2012. That follows the general three-year statute of limitations for making changes to tax returns.
In some cases, same-sex couples who were married during those tax years, but under DOMA were unable to file jointly, now can redo those returns. However, noted the statement on the new guidelines, the couples are not required to amend their prior filings.
In cases where filing a joint return would produce a more favorable tax result for the same-sex couples, amending their past three years of filings is a no-brainer. But if redoing their returns would not noticeably change the couples’ tax liabilities or if they simply don’t want to hassle with it, they don’t have to refile.
Civil unions unaffected
Thursday’s ruling will have a wide-ranging effect on tens of thousands of American taxpayers.
Some couples, however, will not see their filing status change.
The joint Treasury/IRS announcement noted that the DOMA same-sex marriage tax changes do not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state laws.
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Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and a co-author of the e-book “Future Millionaires’ Guidebook.”