7 Things You Must Know Before Your 2013 Tax Filing For Same Sex Marriage Couples

As the April 15th filing deadline approaches, there are important changes to note. When the U.S. Supreme Court struck down the Defense of Marriage Act (DOMA) on June 26, 2013, a number of important tax issues were raised and potential refund opportunities were created for same-sex married couples and their employers.

Same-sex couples will now be able to enjoy the same legal rights and financial benefits enjoyed by heterosexual married couples. any same-sex couple that was legally married in a state that authorized their marriage will be treated as married for federal tax purposes, regardless of whether the couple lives in or is domiciled in a state that does not recognize same-sex marriages. These developments have significant tax and benefit implications, including the following:
 
1.      Affected couples are now required to file jointly or married filing separately, and may not file as single or head of household.

 2.     Affected couples and their employers can exclude the value of spousal health care benefits for payroll and income tax purposes.

3.      Employers must extend certain features of pension, health and welfare benefits to recognized same-sex spouses.

4.      Affected couples are treated as spouses for estate and gift tax rules and exemptions.
 
5.      Filing Status. Same-sex spouses generally must file using either a married filing separately or a joint filing status for tax year 2013 and going forward. For tax year 2012 and all prior years, same-sex spouses who file an original tax return on or after September 16, 2013 (effective date of Revenue Ruling 2013-17) must file using a married filing separately or a joint filing status.
 
6.      Children and dependents. Legally married same-sex couples may file joint returns. Thus, the question of who may claim the child as a dependent will become the same as for heterosexual couples. If the child is a qualifying child under I.R.C. § 152(c) of both same-sex spouses (who file using the married filing separate status), then either parent may claim a dependency deduction for the child.
 
7.      Be aware of The “marriage penalty” – which has long been a hallmark of this country’s tax regime; in its simplest form, this term refers to the fact that higher tax rates do not kick in at amounts that are exactly double those of single taxpayers.
 
 
P.S We will discuss Lesbian and gay parenting tax implications in another article in greater details.
 

Contact Information

Nancy Chin, CPA

Principal

VJN Associates CPAs

(1) 1-212-858-9830

nchin@vjnassociates.com