In the wake of the landmark Supreme Court decision on same-sex marriages (U.S. v. Windsor, No. 12-307 6/26/13), the IRS issued guidance regarding federal tax law issues. It also posted the answers to frequently asked questions for individuals in same-sex marriages based on Revenue Ruling 2013-17. In recent weeks, the IRS updated this list of FAQs to provide assistance—and preparers should take note, because it's more complex than they may have realized.
Currently, seventeen states in the country recognize same-sex marriages. Of these, six are by court order, eight are by state law and three are by popular vote, as described in ProCon.org. They are as follows:
- California, Connecticut, Iowa, Massachusetts, New Jersey, New Mexico by court order.
- Delaware, Hawaii, Illinois (effective June 1, 2014), Minnesota, New Hampshire, New York, Rhode Island, Vermont by state law.
- Maine, Maryland, and Washington D.C. by popular vote.
More states are likely to follow soon. In several battleground states – including Utah, Oklahoma, Kentucky, Virginia, Texas, Michigan, and California – a ban against same-sex marriage was ruled to be unconstitutional, only to be overturned.
Keeping that in mind, here are some of the points about tax filing of same-sex couples clarified by the IRS on its website.
Q. When are individuals of the same sex lawfully married for federal tax purposes?
A. The IRS will look to state or foreign law to determine whether individuals are married. Generally, it will recognize a marriage of same-sex spouses that was validly entered into in a domestic or foreign jurisdiction authorizing the marriage of two individuals of the same sex, even if the married couple resides in a place that doesn’t recognize the validity of same-sex marriages.
Q. Can same-sex spouses file federal tax returns using a married filing jointly or married filing separately status?
A. Yes. For 2013 and thereafter, same-sex spouses generally are required to file using a married filing separately or jointly filing status. For 2012 and prior years, same-sex spouses who file an original tax return on or after September 16, 2013 (the effective date of Rev. Rul. 2013-17), the same basic rules apply. If a same-sex couple filed a 2012 return before that date, they may choose (but are not required) to amend their federal tax returns to file jointly or separately as marrieds. For earlier years, same-sex spouses may amend their returns to file using married filing separately or jointly filing status as long as the statute of limitations hasn’t expired (i.e., the later of three years from the date the return was filed or two years from the date the tax was paid).
Q. Can a taxpayer’s same-sex spouse be a dependent of the taxpayer?
A. No. A taxpayer’s spouse cannot be a dependent of the taxpayer. You can’t have your cake and eat it, too.
Q. Can a same-sex spouse file a return using head-of-household filing status?
A. Someone who is married cannot file using head-of-household filing status. However, a married taxpayer may be considered unmarried and can use the head-of-household filing status if the taxpayer lives apart from his or her spouse for the last six months of the tax year and provides more than half the cost of maintaining a household that is the principal residence of the taxpayer’s dependent child for more than half of the year.
Q. If same-sex spouses who file using the married filing separately status have a child, which parent is allowed to claim the child as a dependent?
A. Either parent, but not both, may claim a dependency deduction for a qualifying child. If both parents claim a dependency deduction for the child on their respective income tax returns, the IRS will treat the child as the qualifying child of the parent with whom he or she resides with for the longer period of time during the tax year. If the child resides with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent with the higher AGI.
Q. Can a taxpayer who is married to a person of the same sex claim the standard deduction if the taxpayer’s spouse itemized deductions?
A. No. If a taxpayer’s spouse itemized his or her deductions, the taxpayer can’t claim the standard deduction. This is the same rule that applies to couples in opposite-sex marriages.
Other FAQs on the site refer to a number of situations where one spouse in a same-sex marriage participates in an employer benefits plan.