Same Sex Couples And Federal Income Tax Returns

An announcement from the United States Department of Treasury on August 29, 2013 means big things for same sex couples and their Federal income tax returns. Based on this revenue ruling, same sex couples that are legally married may now file federal income tax returns jointly. This, however, only applies to federal returns, and does not consider whether or not the state where the couple lives recognizes their union as legal within that state. What is most important from the IRS’ perspective is that the couple was married in state where their union is recognized as legal. If a state only recognizes domestic partnerships or civil unions, but does not recognize legal marriages, then that state does not meet the IRS standard.

Another stride for same sex couples with regard to this revenue ruling is in relation to estate taxes. If a couple has a legal marriage which was formed in a state that permits same sex marriage, then that couple will qualify for the unlimited federal estate tax exemption for provisions that are favoring one another. This means that if a legally married same sex partner dies and leaves their estate to their partner in a state that recognizes legal same sex marriages, there is then no estate tax due upon the death of the spouse, and the federal tax exemption applies.

What Does This Ruling Mean for Pennsylvania?

For example, if a same sex couple marries in a state where their marriage is considered legal, and then moves to Pennsylvania to live, the Federal government has provided that this couple can still file joint federal taxes and claim the estate tax exemption even though they are living in PA, a state with a statute that prohibits recognizing same sex couples.

Can Same Sex Couples Amend Their Previous Federal Income Tax Returns?

Lastly, this revenue ruling states that same sex couples married on the last day of tax years 2010, 2011 and 2012 are eligible to amend their tax returns from single to joint. This amendment may allow same sex couples to receive a significant tax refund.

Will PA Change Its Mind?

Our previous blog posts have discussed the Pennsylvania Attorney General’s unwillingness to defend lawsuits that challenge PA’s ban on same sex marriage. Check back for updates on our website as there are pending lawsuits on this issue currently.