Strategies for Same-Sex Couples

 The terms husband and wife no longer refer to a man and a woman. On June 26, 2013, the Supreme Court ruled that Section 3 of DOMA, which held that marriage for federal purposes was the union of one man and one woman was unconstitutional. General federal tax benefits that apply to opposite sex couples also apply to same-sex couples. This, essentially, creates some advantages and disadvantages for these couples and tax planning becomes an important factor.

The Court did not strike down section 2 of DOMA which provides that states do not have to recognize other state same-sex marriage. There are currently (as of this writing) 15 states (CA, CT, DE, HI, IA, ME, MD, MA, MN, NH, NJ, NY, RI, VT, WA) and the District of Columbia that recognize same-sex marriage.

There are benefits to being treated as married, but there are also pitfalls. For instance, same-sex couples are now liable for the marriage tax penalty because they can no longer file single or head of household. Also, same-sex-couples were benefiting from the adoption credit because they were allowed to adopt their spouse’s child (ren) and qualify for the adoption credit. This is no longer available since they are considered married. The new ruling has significantly affected several tax benefits, varying from:

  • fling status;
  • fringe benefits;
  • contributions to IRAs;
  • Earned income credit;
  • Dependency exemptions
  • Gift and estate tax exemptions; and
  • Social Security eligibility 

The Basic Rules for married same-sex couples:

  • 2013 and later tax years – same-sex spouses must generally file using either MFJ or MFS.
  • 2012 tax year (and late other tax year filers) – on or after September 16, 2013 (the effective date of RR2013-17), same-sex spouses filing an original return must generally use MFJ or MFS. Same-sex couples who filed their 2012 returns prior to September 16, 2013 may (but are not required) file amended returns using MFJ or MFS.
  • 2011 and other prior tax years – same-sex couples may choose (but once again are not required) to file amended returns using a MFJ or MFS status. Of course, these amended returns will only be effective for years in which the statute of limitations for refunds has not expired.

For more information on this ruling and how it may affect your tax situation, please contact our office.


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