IRS Announces Policy for Tax Treatment of Same-Sex Marriages
NEW YORK ( MainStreet)In response to the recent Supreme Court decision that shot down the "Defense of Marriage Act" (DOMA) the U.S. Department of the Treasury announced last month that "all legal same-sex marriages will be recognized for federal tax purposes".
According to the announcement
"The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage."
Treasury Secretary Jacob J. Lew tells us
"This ruling also assures legally married same-sex couples that they can move freely throughout the country knowing that their federal filing status will not change."
Under this new development the "state of celebration" determines the federal tax treatment and not the state of residence.
The announcement further explains
"However, the ruling does not apply to registered domestic partnerships, civil unions, or similar formal relationships recognized under state law."
My former home state of New Jersey has recognized originally "domestic partnerships" and then "civil unions", but does not permit same-sex marriage.
And the press release reminds us -
"Legally-married same-sex couples generally must file their 2013 federal income tax return using either the 'married filing jointly' or 'married filing separately' filing status.
This bottom line of this announcement is that any same sex couple can file a federal return as a married couple, and receive the federal estate tax benefits of a married couple, as long as they are legally married in a state that allows such a marriage, regardless of where they actually live at the time of the marriage ceremony or where they may move to thereafter.
So it appears that under this new procedure all New Jersey resident same-sex couples who want to be treated by the federal government as a legally married couple merely have to go to New York, or another state that allows same-sex marriage, and become legally married there. The same applies for those who live in other states that do not acknowledge same-sex marriage.
Fellow tax professional Jason Dinesen, EA of the Des Moines IA area, who writes and speaks regularly on same-sex tax issues, verified this for me.
"N.J. residents getting a marriage certificate from NY would be considered married for federal tax purposes because they hold a marriage license that is valid in the state in which they received it. This appears to be true regardless of where they actually lived at the time the license was issued."