Monday, October 29, 2012


While some states may permit same-sex marriages, the IRS does not permit these couples to file federal tax returns as married.  This is because the 1996 Defense of Marriage Act (DOMA) defines marriage as the legal union of one man and one woman for federal and inter-state recognition purposes in the United States.

Recent court cases, the most recent in the Second U.S. Circuit Court of Appeals, have found that DOMA’s definition of marriage to be unconstitutional.  If the issue goes to the US Supreme Court and the lower court decisions are upheld this would open the door for same-sex couples legally married in states that permit same-sex marriages to be able to file federal income tax returns as married, either joint or separate. 

I question why same-sex couples would want to be able to file federal returns as married couples, and be hit with the infamous “marriage penalty”.

The Tax Foundation reports that about 67% of married couples filing federal returns are dual-income working couples.  I expect at least the same percentage, if not a higher one, would apply to same-sex couples.  It is dual-income couples who are hit with the marriage penalty. 

Despite some attempt by the “Bush tax cuts” to alleviate the marriage penalty for lower-income couples, it is very much alive, and will be more so if the “Bush” cuts expire.  The marriage penalty can be very costly, especially because married couples who choose to file separately are penalized for doing so in many circumstances, and will pay more tax, sometimes much more, than if they just “lived together” as two Single-filers.

The members of a same-sex couple legally married in an accommodating state are currently each allowed to file as Single for federal purposes, or, more better, one as Single and one as Head of Household, and take full advantage of all the deductions, credits, and phase-out ranges that apply to Single or Head of Household filers.

I can think of many “traditional” married couples who would be as happy as pigs in reality tv to be able to file tax returns as two Singles or one Single and one Head of Household.

I expect that the real reason for pursuing federal acceptance of same-sex marriages lies with the federal estate tax and the unlimited marital deduction, which would apply to a much smaller number of such couples, and other beneficiary issues.



Anonymous said...

Opposite sex couples can already file separate returns if they want. Just get a divorce but continue to live together.

Mariette Knoblauch said...

Two words: Community Property.

In states that have community property for same-sex couples (California, Nevada, and my own state of Washington) trying to do two single returns for a couple under community property rules is, to use your phrase, a "mucking fess".

DOMA does not touch state community property law, so same-sex couples who fall under community property must file reporting half of each others' income. It works for same-sex couples just like it would for me and my husband - half of his paycheck legally belongs to me, and half of my business income belongs to him.

Since we're opposite-sex, we can easily file jointly, taking care of the community property situation nicely. If we wanted to file separately (which usually has no advantage in community property states) we could file MFS, which has provision for reporting the other spouses SSN.

For same-sex couples, I have to do a proforma MFJ, split the income onto the two single returns, using line 21 for the adjustment and attach the worksheet from Pub 555, and then deal with the inevitable notices, since the IRS has no idea how to handle this situation and has provided no forms to handle it.

Robert D Flach said...


Thanks for the word on the community property "mucking fess".

In 40 years I have, thankfully, never had to deal with such a situation. On the few occasions where I did a state return for a married couple in a community property state I always filed a joint return.

To be honest, I was not aware of the complexity of community property issues in separate returns, or how it affected same-sex couples legally married in a community property state.

Thanks again.