Tax Concerns for Same Sex Marriages

There have been plenty of struggles for the legalization of same sex marriages in United States. To date, 17 States have ratified the changes to the law and now permit same sex marriages. Within the past years, 10 States have declared gay marriage legal not including Washington D.C.

The question that now comes to mind is how does this affect taxes for same sex marriage couples?

Couples that got married in one of these legalized jurisdictions are considered to have equal rights regarding tax laws unless they reside in a state that currently doesn’t recognize same sex marriages. Same sex couples can now file amended joint tax returns for the prior three years.

Most of the rules between traditional and same sex marriages apply such as retirement savings contribution limitations, income thresholds, property division, adoption credit rules, dependency exemptions and head of household for separated couples. However, it can be a little more bewildering when living in one state and working in another with opposing bureaucratic laws on same sex marriage.

Many complications may arise from the disparate enactment of same sex marriage laws as it relates to the implications of tax laws across state lines. Normally, married filers who file in more than one state prepare their home state return first and then calculate taxes owed for all other states. They then carry those amounts back to the home state tax return. However, this method is cannot always achieve accurate results for states that do not recognize same-sex marriages.

Married couples who live in a state that recognizes same-sex marriages before 2013 should take a look at their previous returns and see if they should re-file for the previous years as it could be extremely beneficial. Gay married couples who earned significantly more than their spouses re-filing as joint could use the loss against the gain. It is important for taxpayers in these circumstances to call competent tax attorneys or tax counsel to review their options.