As I’ve written before, recognition of same-sex marriage has been expanding rapidly in the United States. Sixteen states and the District of Columbia allow (or will soon allow) same-sex marriage. Further, New Mexico has no state law allowing or denying such marriages. However, the most populous counties in the state allow same-sex marriage and are issuing marriage licenses to same-sex couples. Thus, same-sex marriage is allowed in jurisdictions in which about 40% of Americans live.
This expansion has even more significance in light of the Windsor decision, which held that the Defense of Marriage Act did not allow (or force) the federal government to treat same-sex married couples differently than traditional married couples in the same state. In addition, the IRS issued Revenue Ruling 2013-17, which provided that same-sex married couples will be treated as married for federal tax purposes, wherever they live, as long as the marriage was valid where performed.
Federal Income Tax Reporting
Thus, for federal purposes, a married same-sex couple must file federal tax returns as “married” (either joint or separate), notwithstanding how their state of residence treats their marriage.
State Income Tax Reporting
For state income tax purposes, the states which recognize their same-sex marriage require them to file tax returns as married, as well.
However, most states refuse to recognize same-sex marriages by statutory or constitutional provision. In most states, while same-sex married couples would file a federal income tax return(s) as married, they would file their state income tax returns as unmarried individuals.
Missouri, a state which does not recognize same-sex marriage, now requires same-sex couples who are validly married elsewhere to file their state income tax returns with the same status as their federal return. For example, Joe and Bob live in St. Louis and fly to New York and get married. They must file their federal return with a “married” status (per Rev. Rul. 2013-17), because their marriage was valid where performed (in New York), even though their residence is in Missouri, which does not recognize their same-sex marriage. If they file their federal income tax return as married filing jointly, Missouri will now require them to file their state income tax return as married filing jointly, notwithstanding the fact that Missouri does not recognize their same-sex marriage. Here is a link to a story on the Missouri position. Here is a link to the executive order.
Same-sex couples, whether married or unmarried, continue to face a confusing array of rules regarding their relationship. Of course, a comprehensive estate plan can help bring certainty to their lives.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555