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Tax Updates In Regards To Recent DOMA Ruling

Posted on October 1, 2013 by
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same-sex marriageSame-sex couples across the nation rejoiced over the June 26th Supreme Court ruling regarding the unconstitutional aspects of Section 3 in the Defense of Marriage Act (DOMA). These couples can now be treated as married couples when filing their federal taxes, and given the same benefits that married opposite-sex couples enjoy.

Important Dates In Regards To Filing Federal Taxes

With the recent tax changes, married same-sex couples can begin filing amended tax returns for the 2010-2012 tax years if they wish to claim refunds as they gear up for the 2013 tax year. Here are two important dates to pay attention to in regards to filing federal taxes.

  • September 16, 2013: From this date onward, married same-sex couples must file their taxes as “married jointly” or “married separately.” Even if the same-sex couple lives in a state that does not recognize same-sex marriage, the IRS will accept the federal joint tax return under the “state of celebration” standard. The state of celebration standard recognizes the same-sex marriage based on the jurisdiction where the couple was married instead of the state where they currently dwell.
  • October 15, 2013: This date is the deadline same-sex couples have for filing amended tax returns if they wish to claim tax benefits for the 2010 tax year. This situation only applies to tax payers who filed for a tax extension and sent in their returns between April 16, 2010 to October 15, 2010. There is still time to claim refunds for 2011 and 2012 as there is a three-year statute of limitations for tax refunds. The same-sex couple must file an amended return for each past year in which they wish to claim a tax refund.

In addition, the same-sex marriage tax guidelines also applies to all federal estate taxes, gift taxes and income taxes. Employee benefits, tax credits, IRA contributions, and personal/dependent deductions and exemptions are also included in the federal tax guidelines.

Remaining Issues For Filing State Tax Returns

Currently, as many as 13 states recognize same-sex marriages. In those states, a couple who has to pay state taxes won’t have any issues for 2013 when filing state and federal taxes. For same-sex couples living in the vast majority of states that don’t recognize same sex marriages, the uncertainty continues as tax preparers wait to hear from the IRS on how to proceed.

Same-sex couples could file a protective amended claim so they can receive their state tax refunds for 2012 once a ruling is made. A protective claim will allow the couple to retain their rights to claim a refund. Otherwise, the same-sex couple will file a joint federal return, but separate state tax returns as either a single individual or a head of household filing status for the 2013 tax year unless their state changes the ruling on same-sex marriages.

Another issue same-sex couples face are state estate and inheritance taxes. Four states (Pennsylvania, Kentucky, Tennessee and Nebraska) do not recognize same-sex marriages but do collect on state inheritance taxes. Same-sex couples will not be given state benefits in these four states. Other states will grant inheritance and estate tax benefits if the same-sex couple registers themselves as having a civil union or domestic partnership.

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