The IRS has finally issued a statement regarding the Supreme Court’s June 26th judgment in E.S. Windsor, 2013-2 USTC 50,400, which makes Section 3 of the Defense of Marriage Act no longer valid and allows the federal government to recognize same-sex marriages despite the state’s position.
Marital Status Affects a Myriad of Fed Tax Provisions
A taxpayer’s marital status affects 100’s of federal tax provisions so this really moves gay marriage in the direction of ‘true’equality. Thousands of couples in same-sex marriages, domestic partnerships and civil unions have been waiting on pins and needles to hear any details about how the Windsor decision would affect IRS filing. As an update to our previous blog Same Sex Marriage: Far from Equal under the Tax Laws on August 29th, the IRS announced an update to the Same-Sex Marriage tax laws. The IRS decision essentially closes the divide between the states and the federal government when it comes to recognizing same sex marriages under the tax laws. According to the IRS report:
The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.
As reported by CCH.com, the ruling was issued two months after the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA) in E.S. Windsor (2013-2 ustc 50,400, June 26, 2013), and its effect on all federal taxes, including income taxes, estate and gift taxes, payroll taxes associated with employee spousal benefits, and more. Reports CCH:
In an effort to simplify and streamline tax administration as much as possible, the IRS, like many other federal agencies, took a “place of celebration” approach rather than using a couple’s “place of domicile” to determine their tax status.
For legally-married same sex couples, they will file as married filing jointly or married filing separately for the entire 2013 tax year. Incidentally, the ruling also applies to earlier tax years as the amendment can be grandfathered in since the statute of limitations is still open for the years 2010, 2011 and 2012. Same sex couples, if they choose to, can file an amended return to reflect their marital status. Notably, legally-married same-sex couples who have not yet filed their 2012 returns now have a deadline to file as unmarried taxpayers. If they file on or after September 16, 2013, they are married under the tax laws and must file under that status.
Consult with Your CPA
While the ruling is certainly cause for celebration for same sex couples, for those couples who are legally married but currently reside in jurisdictions that do not recognize same-sex marriage, the return is complex. While these couples will now be recognized as married under federal tax laws, it is a very prudent move and quite recommended to consult with a professional accountant on how to prepare state income tax returns as the IRS has made it quite complicated.
For any and all of your questions related to same sex marriage tax returns, call Certified Public Accountant Joel Lewinson today at 818-593-6777 for a consultation.
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