IRS Recognizes Same-sex Couples Marriage Regardless of State Boundaries

Posted on September 9, 2022

IRS Recognizes Same-sex Couples Marriage Regardless of State Boundaries

There was much speculation about how the IRS would handle the married status of same-sex couples who lived in states that do not recognize their marriage. The Treasury Department and the Internal Revenue Service have announced that the IRS will recognize the marriage of legally married same-sex couples for federal tax purposes, even if they reside in states that do not legally recognize their marriage.

The New York Times refers to the decision of the Supreme Court to strike down Defense of Marriage Act, giving equal marriage rights to all homosexual married couples:

“It is the broadest federal rule change to come out of the landmark Supreme Court decision in June that struck down the 1996 Defense of Marriage Act, and a sign of how quickly the government is moving to treat gay couples in the same way that it does straight couples.

The June decision found that same-sex couples were entitled to federal benefits, but left open the question of how Washington would actually administer them. The Treasury Department answered some of those questions on Thursday. As of the 2013 tax year, same-sex spouses who are legally married will not be able to file federal tax returns as if either were single. Instead, they must file together as “married filing jointly” or individually as “married filing separately.”

Their address or the location of their wedding does not matter, as long as the marriage is legal: a same-sex couple who marry in Albany, N.Y., and move to Alabama are treated the same as a same-sex couple who marry and live in Massachusetts.”

This is good news for same-sex couples because now they will be able to move without being in danger of losing their federal tax rights. Same-sex couples will also be able to file amended tax returns for certain past years and claim a refund.

Along with the gains, there are complications as well. The New York Times elaborates:

“But the ruling creates complications for same-sex couples who live in any of the 37 states that do not recognize their marriages. Previously, such couples filed federal and state tax returns as individuals. Now, they will have to file their federal returns as other married couples do, but may be required to file their state returns as individuals.”

“There’s going to be a cumbersome workaround,” said Nanette Lee Miller of Marcum L.L.P., a public accounting firm. She sees it as a paperwork bother more than a financial issue.

States might also respond to the federal ruling with changes of their own. “Most state income tax regimes begin with federal taxable income as the starting point,” Marvin Kirsner, a tax lawyer at Greenberg Traurig, said in an e-mail. “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.” He added,

“We will need to see guidance from each nonrecognition state to see how this will be handled.”

This is another step towards greater equality within the tax code, as this marks the beginning of same-sex couples having the same married tax benefits as their straight counterparts.