IRS Announcement: Same-Sex Couples Recognized as Married for Federal Tax Purposes

Tax News

As a result of the recent U.S. Supreme Court decision to strike down part of the Defense of Marriage Act (DOMA) on June 26, the U.S. Treasury Department and the IRS announced today that same-sex couples legally married in states that recognize same sex marriage, will be treated as married for federal tax purposes.

This decision gives people in same-sex marriages the same federal tax benefits previously only available to heterosexual marriages, potentially saving them time and money when it’s time to file their taxes and could mean a reduction in their tax liability.

As always, we are here to break down what this IRS announcement means to you:

Who does this impact?

  • Whether you live in a state that recognizes same-sex marriage or not, as long as you were legally married in a state that recognizes same-sex marriages this applies to you.
  • This ruling does not apply to individuals in Registered Domestic Partnerships or Civil Unions.

What does this mean for your taxes?

  • Legally married same sex couples must now file their 2013 taxes as married filing jointly or married filing separately.
  • You also have the choice to file an amended return as a married couple for the past three years, tax years 2010, 2011, and 2012.  The IRS may also allow you to file a refund claim for tax years 2009 and earlier if you already signed an agreement with the IRS due to special circumstances.  Whether you choose to amend should be dependent on your tax situation.  Tax Caster 2012 is a great free way, to understand how this will impact your 2012 tax return.

Deductions and Credits for Dependents – If you file married filing jointly, you will be able to take tax deductions and credits for your children and other dependents.

  • Dependency Exemption –  The dependency deduction may mean an additional tax deduction of $3,900 per dependent and an additional $3,900 exemption for your spouse.
  • Earned Income Tax Credit – When you file as a married couple you may be eligible for an Earned Income Tax Credit worth up to $6,044 for 2013.
  • Education Credits and Deductions – Education is expensive, you may be able to claim a tax deduction on your taxes of up to $4,000 for your dependent or spouse’s education.

Tax Rates When Filing as a Married Couple

  • There may be a possible reduction in your tax liability since tax rates are typically lower for couples filing married filing jointly.  A married same-sex couple who earns $80,000 per year may see savings of at least $500 when filing jointly without considering additional deductions they will be entitled to.

Savings on Tax Prep

  • You will potentially be able to save time and money on your tax preparation costs.  People who previously had to pay high fees to have someone prepare their taxes due to the complexity of filing multiple federal and state returns, can easily and accurately prepare their taxes together with TurboTax at a significantly lower cost.

Tax Savings on Inherited Property and Gifts

  • A surviving spouse in a same-sex marriage can now take advantage of the estate tax marital deduction, which allows an unlimited deduction from the gross estate of property passing to the surviving spouse.
  • Legally recognized same-sex couples can now gift money and take advantage of a doubled annual gift tax exclusion of $28,000).

The ruling does not apply to registered domestic partnerships, civil unions, or similar formal relationships recognized under state law.

What Should I Do Now?

  • TurboTax has you covered.  As with all tax laws TurboTax will be up to date with the latest tax law changes.   Whether you want to amend your prior years tax return or have a question we are here for you.
  • You can check and see if these changes to the tax law will affect your tax year 2012 return with TaxCaster, a free online calculator.
  • If you didn’t file your 2012 tax return yet, you have the option to chose to file as married or single prior to 9/16.  If you will not benefit by filing married filing jointly or married filing separately you can complete your tax return with TurboTax before that date.  After 9/16 you must file as married.
  • Check back with the blog for more updates and tax benefits for same-sex marriages.

Comments (13) Leave your comment

  1. Can I use Turbo tax to file my taxes if I am married legally in the eyes of the federal government, but I am forced to file as single in my state tax return?

    I was married in New York, but I live in Louisiana.

  2. Lisa,

    My partner and I got married in Massachusetts in July 2013, so I assume we can file married jointly come tax time.

    I have always filed single until this upcoming year.

    However, my partner has no proof of income as he just received his green card in November 2013.

    How do I list him on the tax return? Do we still file married jointly? Do we estimate his income from 2013, although we have nothing in writing.

    Thank you!

      1. Thank you for the response.

        He already has a social security number.

        However, how do we list his income if he has no proof of income (nothing in writing). – do we estimate how much he made, or just put $0 as income?

  3. Will TurboTax give options for filling married for federal and single for states like here in Colorado where marriages are not legal? We were legally married in California but live in Colorado. How does this work?
    Thanks,
    Rachel

  4. Will the TurboTax programming for 2013 accommodate legally married same sex couples that want to file jointly at the federal level, but live in a state that will not recognize same sex marriage and thus need to reconfigure federal return as single for filing at the state level? Thus, the federal return needs to be configured jointly for federal (and filed) and configured as single for state (and filed).

  5. We live in a marriage non-equality state (Wisconsin) and are thinking about visiting an equality state (New York) to get married. How will TurboTax handle the fact that we must file our state returns as unmarried and our federal return as married?

  6. Your information states…”as long as you were legally married in a state that recognizes same-sex marriages this applies to you.” However, Revenue Ruling 2013-17 states that “for purposes of this ruling, the term ‘state’ means any domestic or foreign jurisdiction having the legal authority to sanction marriages.” Therefore, you should make clear that foreign marriages (e.g. Canadian) also qualify, as do those in the District of Columbia (which is not a state). Indeed, Edie Windsor, who fought & won the legal battle to overturn DOMA, was married in Toronto, Canada.

  7. Your information states…”as long as you were legally married in a state that recognizes same-sex marriages this applies to you.” However, Revenue Ruling 2013-17 states that “for purposes of this ruling, the term ‘state’ means any domestic or foreign jurisdiction having the legal authority to sanction marriages.” Therefore, you should make clear that foreign marriages (e.g. Canadian) also qualify, as do those in the District of Columbia (which is not a state). Indeed, Edie Windsor, who fought & won the legal battle to overturn DOMA, was married in Toronto, Canada.

  8. Well I dont think there is much difference between male-female couples to same sex couples. Its great that you shared this one.

  9. Your information states…”as long as you were legally married in a state that recognizes same-sex marriages this applies to you.” However, Revenue Ruling 2013-17 states that “for purposes of this ruling, the term ‘state’ means any domestic or foreign jurisdiction having the legal authority to sanction marriages.” Therefore, you should make clear that legal foreign marriages (e.g. Canadian) also qualify, as do those in the District of Columbia (which is not a state). Edie Windsor, who fought & won the legal battle to overturn DOMA, was married in Toronto, Canada.

  10. My wife and I got an extension on our 2012 taxes, anticipating that the DOMA decision would go the way it did.

    Earlier, we would have had to file jointly in MA (where we live), and separately for the feds. Now we want to (and can!) file jointly for the feds and MA.

    TurboTax still reads “Married same-sex couples in Massachusetts are required to file a state tax return as married, but your individual federal returns must still be filed as unmarried.”

    When will this be updated? We definitely want to use TurboTax to file!

    1. Hi,
      You can definitely use TurboTax to file your taxes as married filing jointly per the IRS announcement as long as the state where you were married recognizes same-sex marriages.

      If this excerpt is from a old blog post, blog posts are all date sensitive so we wouldn’t go back and edit a dated post, but you can follow the most recent announcement in our new post.

      If this is from an FAQ, they are currently being updated to reflect changes.

      Thank you,
      Lisa Greene-Lewis

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