If you were legally married, but could not file a joint return because the IRS did not allow legally married same-sex couples from doing so, you now have the option of amending each of your tax returns back to 2010 with a “married filing jointly” status.
For years, this issue was governed by the Defense of Marriage Act (DOMA), enacted on September 21, 1996. Section 3 of DOMA provides that, for all purposes of federal law, marriage must involve opposite sex arrangement. Therefore, the IRS has been legally prohibited by DOMA from allowing same sex couples to file their tax returns jointly. Even if the taxpayers were legally married in a state that recognizes gay marriage, they had to file separate tax returns with the IRS.
Then, on June 26, 2013, the United Sates Supreme Court, in United States v. Windsor, 133 S. Ct. 2675, 186 L. Ed. 2d 808 (2013), upheld the District Court ruling that declared Section 3 of DOMA unconstitutional because it violates the principles of equal protection. It further declared that the federal government must look to state law to define marriage.
The Windsor opinion left ambiguous to which state’s law the federal government must look to define marriage. For example, how would a same-sex couple, legally married in the State of Maryland, but subsequently moving to Virginia (which does not recognize same-sex marriages), appear to IRS for federal income tax purposes? Would the IRS look to Maryland law (where the couple entered into a marriage) or would the IRS look to Virginia law (where the couple resides)?
On August 29, 2013, the IRS issued Revenue Ruling 2013-17 resolving the ambiguity resulting from Windsor. It states that same-sex couples, legally married in a jurisdiction which recognizes such marriages, will be treated as married for federal tax purposes without regard to jurisdiction of residence.
purposes, the validity of a same-sex marriage that was valid in the state where it was entered into, regardless of the married couple’s place of domicile.
Keep in mind that while “spouse” includes an individual married to a person of the same sex, and the terms “husband” and “wife” are to be interpreted to include same-sex spouses, the term “marriage” does not include registered domestic partnerships, civil unions, or similar arrangements.
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. Individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations. Because Revenue Ruling 2013-17 applies prospectively as of September 15, 2013, taxpayers may amend their tax returns for 2010, 2011, and 2012.
It is important to note that amending your tax return in order elect the filing status to “married filing jointly” does not necessarily mean that you will be entitled to a lower tax liability resulting in the issuance of a refund. In fact, due to the "marriage penalty" inherent to the rate structure, amending your tax return may actually result in a greater tax liability. Therefore, it is important to be advised as to the consequences of amending your tax return before doing so.
Contact us before the statute of limitations runs out so that we may advise you and your spouse on the possibility of amending your 2010, 2011, and 2012 tax returns and obtaning a refund for those years.