The IRS has recently released updated guidance on the treatment of certain circumstances affecting same-sex couples following the Defense of Marriage Act (DOMA) ruling. Here is a brief overview of the changes taking place:
The recognition of a same-sex marriage for federal tax purposes is determined by the individuals’ state of celebration. As long as a same-sex couple was married in a state that legally recognizes same-sex marriages, they are permitted to file their federal tax returns under the filing status of either married filing separately or married filing jointly. This will apply regardless of whether or not the state that the couple resides in legally recognizes same-sex marriages.
September 16, 2013: This is the date that determines whether or not same-sex couples can choose to amend their 2012 tax return. If a same-sex couple files a return prior to the September 16th date, they are allowed to amend their filing status and file as either married filing jointly or separately. If a return was filed on or after September 16th, 2013, the IRS advises same-sex couples to subsequently file as married filing jointly or separately, now that the IRS has published regulations on the issue.
The IRS is also allowing same-sex couples that previously filed a timely return for the 2011 tax year and earlier, to amend those returns and file married filing jointly or separately, if they so choose. However, this option only applies if the standard time to file an amended return has not expired.
If a same-sex couple with a child decides to file married filing separately, only one parent may claim the qualifying child as a dependent.
If one individual in a same-sex couple decides to itemize their deductions when filing married filing separately, this revokes the other taxpayer’s ability to use the standard deduction. Both taxpayers in a same-sex marriage must itemize if they choose to file married filing separately.
Several employer-sponsored benefits, such as health insurance coverage, offered to a same-sex spouse are no longer required to be included in the gross income of the employed spouse. The taxpayer receiving the W-2 that includes the employer sponsored benefit, is allowed to amend previous years returns (to the extent claims for a refund are allowed) excluding these amounts from gross income and reclaiming any federal income tax paid on these benefits.
For more information on the DOMA legislative changes and time frames for amending tax returns, contact our office.