- States are still free to choose whether or not to recognize gay marriages. This means that even though you can now file a federal return together as a married couple, you still might have to deal with filing Single returns at the state level. States are taking a number of different approaches to this…some states are allowing you to use the same status as your Federal return, others are requiring you to prepare separate state returns as though you were un-married. So if you’re in a same-sex marriage but living in a state that doesn’t recognize it, it’s a really good idea to seek professional guidance in preparing your tax returns for 2013.
- You have the option (but not requirement) to amend any year between 2010 and 2012 in which you would have paid lower overall tax by filing jointly. For many couples I work with, the community property rules in California effectively mean there is little to no benefit to amending prior year returns. (As mentioned earlier, in some cases same-sex couples benefited from loopholes.) However, if you were in a same-sex marriage in 2012 or a prior year, and one spouse received health insurance from the other spouse’s employer, then it may very well be worth amending the prior years. This is another area that can be complicated, so professional guidance is recommended.
- Also, even if it’s not worth amending your income tax return, you might still want to file for a refund of excess employment taxes if you had “imputed income” as a result of your employer taxing your spouse’s health benefits. The IRS recently issued instructions for employers to file for a refund of their half of these employment taxes, but your employer should contact you about reimbursement of employment taxes you paid. However, even if your employer doesn’t contact you, you still have the option of filing on your own for this reimbursement…which may be necessary for years before 2013 because I suspect many employers won’t go through all the trouble of following this procedure for previous years when it’s relatively small amounts involved for most employers (compared to the cost of amending prior year payroll records). I know this gets pretty confusing, but basically if you have a legal same-sex marriage, and one spouse received health benefits from the other spouse’s employer, contact a professional who’s familiar with this ruling to see if you may be eligible for a refund of taxes that were paid as a result of the IRS not recognizing your marriage.
So the vast majority of couples in same-sex marriages should see a tremendous simplification of their tax-filing requirements in the post-DOMA world…although some couples living in states that don’t recognize their marriages may have some new wrinkles to deal with. Even in states that recognize gay marriage, couples should still consult a professional in this first year in order to review the potential for refunds from prior years.