Five Things Married Same-Sex Couples Need To Know Before Filing Their Taxes

It's tax season, and for many same-sex couples, there’s much to navigate that’s new. After the Supreme Court’s watershed 2015 Obergefell decision to make marriage equality the law of the land, we received many questions about the income tax filing process and how the change has affected things for same-sex couples.

Filing taxes is serious business, and everyone’s circumstances are different, so you should consult a qualified tax expert to help navigate your personal filing.  The following information was jointly developed by Lambda Legal, the American Civil Liberties Union (ACLU), Freedom to Marry, Gay and Lesbian Advocates and Defenders (GLAD), Human Rights Campaign (HRC), the National Center for Lesbian Rights (NCLR) and the National Center for Transgender Equality (NCTE). View the full guide here.

1. How will the Supreme Court’s marriage ruling impact how I file my income taxes?

If you are married it will impact your filing status. “Filing status” refers to whether you identify yourself as “single,” “head of household,” “married filing jointly” or “married filing separately” on your federal and state income tax returns. (Some states use different terminology.) Only married couples can file as married, whether jointly or separately. The filing statuses of “single” or “head of household” are reserved for unmarried persons.

Under federal law, your filing status is generally determined on the last day of the calendar year.  If you are married on the last day of the year, you will be considered married for the entire year.  Alternatively, if you are single on the last day of the year (if you got divorced, for example) you will be considered single for the entire year. Those joined in civil unions or domestic partnerships are not considered married by the IRS. There may be exceptions to these general rules, and state laws vary, so check with your tax advisor to be certain or if you have other questions about your filing status.

Married same-sex couples, even if they lived in formerly non-marriage states, have been required to file their federal income tax returns as married starting with tax year 2013. Revenue Ruling 2013-17, available here. Until the Supreme Court’s marriage ruling in June 2015, many state laws barred married same-sex couples from filing as “married,” whether jointly or separately, on their state income tax returns. Anyone who is married or gets married must now file both their federal and state income tax returns as married (whether jointly or separately). If you have been filing your state tax returns with a filing status of “single” or “head of household,” those statuses no longer apply to your state (or federal) income tax returns.

2. How will the Supreme Court’s marriage ruling change how much I owe in my state income taxes?

Whether a couple who gets married or whose marriage is now recognized in their home state will owe more or less for any particular tax year depends on the couple’s specific situation, which may also change from year to year. For an individualized income tax analysis, including whether you would pay less in taxes by filing as married filing separately rather than married filing jointly, consult a qualified tax advisor.

For federal income tax returns and in some states that have graduated tax rates, joint filing tends to favor married spouses with very different incomes (e.g. where one spouse earns little or no income and the other earns income to support the family). Joint filers in this situation will generally, but not always, owe less income tax than they would have if they filed as married filing separately or as single (unmarried) taxpayers. For some couples—specifically where both individuals are high earners—being married may result in them owing more income tax than they would if they remained unmarried.  These differences tend to be less pronounced on state income tax returns when compared with federal. A tax advisor can tell you how getting married would impact your income tax as well as whether, if married, you would be better off filing jointly or separately.

3. What steps should a newly married and newly respected couple consider taking with respect to their income taxes?

If you earn wages as an employee, you may want to consult a tax advisor about whether to change your filing status and claimed allowances on Form W-4 and the state equivalent, which may affect your withholdings. It may also be important to consult a tax advisor if you pay estimated income taxes on a quarterly basis about whether to change the amount of these payments.

4. I paid more in state taxes than I should have because my marriage wasn’t recognized. Should I file for a refund?

Because already married couples have been filing their federal income tax returns as married persons, they may know that they have overpaid their state income taxes because the state did not respect their marital status. There are state-specific procedures for seeking a refund. Consult with a tax advisor to determine if it makes sense for you to pursue a refund claim.

5. Are there any additional considerations for couples living in community property states?

Yes. The federal government has already released guidance about federal income taxation for married same-sex couples who live in community property states. If you now marry in the state where you live or your marriage is now recognized by your home state, you will file state income taxes as a married couple. You will then be able to combine your income and file one return just as other married couples if you use the “married filing jointly” filing status. If you file jointly, you will avoid the need to engage in a process known as income-splitting, in which all community income earned by both individuals is added together and half is allocated to each individual. If you use the “married filing separately” filing status in one of these community property states, then the same rules that apply to different-sex couples who use this status also will apply to you. This means you will apply income-splitting to your separate returns, unless an exception applies. For example, you may have entered into a valid pre-nuptial or post-nuptial agreement opting out of the community property system.

For additional IRS Resources, go to http://www.irs.gov/uac/Answers-to-Frequently-Asked-Questions-for-Same-Sex-Married-Couples, and http://www.irs.gov/uac/Answers-to-Frequently-Asked-Questions-for-Registered-Domestic-Partners-and-Individuals-in-Civil-Unions.

This guidance is intended to provide general information.  It should not be construed as legal advice or a legal opinion on any specific facts or circumstances, and does not create an attorney-client relationship.  None of the organizations involved in publishing this information can ensure the information is current or be responsible for any use to which it is put.

No tax advice is intended, and nothing therein should be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.