There was a recent Supreme Court decision which determined that the Federal ban on same sex marriages in DOMA (Defense of Marriage Act) was unconstitutional. This means that the Federal government can no longer prevent states from allowing same-sex marriages.
Further, there is a constitutional rule known as “full faith and credit.” This means the Federal government has to give full faith and credit to state laws as long as there is no Federal law in direct contrast to the state law. When combining these two new rules, being that (1) the Federal government cannot prevent a state from allowing gay marriage and (2) the Federal government has to abide by state laws; the result is that the Federal government now has to recognize gay marriages.
There are and will be many legal consequences that will take place with this new law being implemented. But what does this mean for same sex couples when filing tax returns?
Before anything really changes, the state has to legally recognize same sex marriages. If living in a state that does not recognize them, then the same-sex couple’s Federal tax rights do not change and they cannot file married and joint or married and separately. Pennsylvania currently does not recognize same sex marriages.
In states that do legally allow same sex marriages, the IRS has to recognize the marriage as valid under the full faith and credit clause. This means that these married couples now have to file their tax return with the option of either being married and joint or married and separate. These filing statuses allow the couple to take advantage of many deductions, credits and tax advantageous on their income tax returns that are not available to those that file single.
This allows married same sex couples to file amended income tax returns. If the couple has been legally married for previous years, they can file an amended return via form 1040X and claim additional refunds to which they were previously not entitled. Refunds are not paid out after three years, so the couples should not bother amending any years older than 2010.
Speak to your tax professional about the specific benefits couples can receive when using a married and joint filing status. The possible benefits are tailored to each individual and couple; so married and joint is not always the best status to use in every situation, but at least same sex couples in states with legal gay marriage now have the option.