Tags: irs | same-sex | marriage | file | jointly

IRS Same-sex Marriage: Couples Can Now File Federal Taxes Jointly

By Clyde Hughes   |   Friday, 30 Aug 2013 03:02 PM

The IRS will, for the first time, treat same-sex couples who are legally married the same as opposite-sex couples in tax filings, the Obama administration said Thursday.

It will not matter if the state the couple lives in recognizes same-sex marriage. If the couple is legally married, they can file joint federal tax returns.

The change follows up on the U.S. Supreme Court decision striking down a provision of the 1996 Defense of Marriage Act.

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USA Today reported that the biggest savings for same-sex couples likely will come with the tax exclusion for employer-paid health insurance, which many same-sex spouses previously bought on an after-tax basis. The newspaper said a couple could receive more than $1,000 with the deduction.

"This is uniformly good for everybody," Todd Solomon, a lawyer who specializes in pension plans and benefits, said to USA Today. "Their health benefits just went from taxable to non-taxable."

The Associated Press said the married same-sex couples will be treated the same for all federal tax purposes including income, gifts, and estate taxes. The new rules will cover all provisions where marriage is a factor: taxpayer's filing status, personal and dependent exemptions, and standard deductions.

"With today's ruling, committed and loving gay and lesbian married couples will now be treated equally under our nation's federal tax laws, regardless of what state they call home," Chad Griffin, president of the Human Rights Campaign, told The Associated Press.

The Human Rights Campaign is the largest gay rights group in the country.

The new ruling, though, does come with complications at the state level, according to The New York Times. Previously, same-sex couples filed federal and state tax returns as individuals. Now, they will be able to file their federal returns as other married couples do, but may be required to file their state returns as individuals in the 37 states that do not recognize same-sex marriages.

"There's going to be a cumbersome workaround," Nanette Lee Miller of Marcum LLP, a public accounting firm, told the New York Times.

"Most state income tax regimes begin with federal taxable income as the starting point," Marvin Kirsner, a tax lawyer at Greenberg Traurig, told the New York Times. "These state taxing authorities will have to figure out how to deal with a same-sex married couple who file a joint income tax return for federal tax purposes."

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Related stories:

Pa. Governor: Same-Sex Marriage Licenses Not Valid

GOP Rep. Pearce: Judge's Decision Legalizing Gay Marriage 'Reckless'

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