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Same-Sex Marriage and Taxes

On June 24th, 2011, under the Marriage Equality Act, The New York State Legislature passed a bill legalizing same-sex marriages in the State of New York. One month later, on July 24th, 2011, same-sex marriages were officially legal. How does this affect a couple’s tax situation? Can the couple file a Married Filing Jointly tax return?
A same-sex married couple can file jointly for the State (if they live in one of the six states listed below) but not for the IRS. This is due to the 1996 Defense of Marriage Act (DOMA) which prohibits the Federal Government from recognizing same-sex marriages. So what are taxpayers supposed to do when they are allowed to file jointly by the State but not Federal?
This issue is a very recent topic of discussion. New York is one of six states that have legalized same-sex marriage. The other five include Vermont, New Hampshire, Massachusetts, Connecticut, and Iowa. If the couple is filing taxes in one of these locations, they will be eligible for some tax benefits. However, if you read our prior blog on “Marriage and Taxes”, you already know of these tax benefits and the “Marriage Penalty”. Because the New York State bill was passed in 2011, this past tax season was the first one in which same-sex couples were able to file the Married Filing Jointly tax return for New York State.
In many situations, since the Federal Government does not recognize same-sex marriage, gay couples who are living in states that do recognize their various legal unions must still file two completely separate federal returns. Even though most states have not legalized same-sex marriage, some recognize a marriage that took place in a state where it was legal. In the event where a same-sex couple weds in New York and moves to Maryland (where marriage is not legal, but recognizes marriages legally formed), they would be able to file a joint Maryland state tax return. However, if the couple weds in New York and moves to Utah (which bans all same-sex marriages and other forms of unions), they will have to file two separate Federal returns and two separate Utah State returns.
Because of the extra time that it will take accountants to prepare the additional tax returns, same-sex married couples may be facing higher tax preparation fees. It is also important that your accountant be knowledgeable about these same-sex tax issues. Do you know a same-sex couple in New York; have they chosen to file jointly? Did they consider these filing issues?

Please contact Armel Tax at or 646-699-4818 for questions pertaining to this or any other tax issues.


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