Same-Sex Marriage

Same-Sex Marriages Recognized For Federal Tax Purposes

Yesterday, the US Treasury and IRS ruled same-sex couples legally married in a jurisdiction that recognizes that marriage will be valid for federal tax purposes.  This applies whether or not the couple is currently living in a jurisdiction that recognizes the marriage.  This ruling clarifies tax filing and benefit questions following the Supreme Court striking down the Defense of Marriage Act (DOMA) in June of this year.  You can read the complete ruling here.

What about Illinois Civil Unions?

This ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law, thereby excluding Illinois Civil Unions.  However, if you were married in another state or foreign country recognizing same-sex marriages, you may still qualify.

What benefits does this include?

The ruling applies to all federal tax provisions where marriage is a factor.  This includes:

  • The ability to file a joint tax return and the ability to take personal and dependency exemptions
  • Taxation of employee benefits, such as tax free receipt of same-sex spousal health insurance
  • Estate and gift taxes, allowing for unlimited tax-free gifts and unlimited marital deduction for estate tax purposes to your same-sex spouse

Can I Amend Prior Tax Returns?

Yes, if you previously filed single or head of household in a year in which you were legally married, you may be eligible to amend the return to change marital status. There are limitations to be aware of.  For instance, the statue of limitations general restricts amendments of returns to three years following the original due date of the return.  For most couples, this would restrict them to amending only 2010 and beyond.  Exceptions may apply for specific circumstances.

What are the next steps?

For our clients who are affected by this ruling, we will be discussing how this applies to you directly and how to adjust your financial and tax plan accordingly.

If you are not a client, but interested in finding more about how your tax situation integrates into your entire financial picture, contact us today!