Both the U.S. Department of Treasury and the IRS have recognized all legal same-sex marriages for tax purposes since 2013, but at the state level, the situation continues to evolve. More than a dozen states made same-sex marriage legal in 2014 alone. Same-sex couples married in those states last year, or those who changed their status from a domestic partnership, now have new filing challenges.
For couples in the more than 30 states that recognize same-sex marriage, filing state and federal returns is frequently no more challenging than for many straight couples. But for couples who live and work in a state where their marriage isn’t recognized, or earn income in multiple states with varying levels of recognition, staying on top of the changes to their taxes can be a herculean task.
“Before there was marriage, our lawyers had a lot of options in how they would list our family relationships for tax purposes,” says D’Arcy Kemnitz, a lawyer and executive director of the National LGBT Bar Association in the District of Columbia. “For many of us, there are fewer options now that we’re filing as married, because there is the marriage tax. So those of us who have similar incomes in our marriage will be paying more than what we were before marriage was allowed.”
Couples who have had a change in status, or have moved to a state with different recognitions, can file an amended return using Form 1040X, the Amended U.S. Individual Income Tax Return
Information Changes Rapidly
Even same-sex couples who haven’t had a change in status or a favorable legal ruling on their marriage shouldn’t expect to file the same way as they did in previous years, says Annette Nellen, a certified public accountant and professor of accounting and finance at San Jose State University. “If you had to file single head of household in a certain state last year, you should not assume it’s the same for 2014,” she notes.
Nellen says that same advice applies to information issued by a state’s tax authority, as it can lag behind changes to the marriage law. “Be careful where you’re getting advice, because there’s a lot of misinformation out there,” Nellen warns. “If it doesn’t sound right or too good to be true, you should go double-check.”
Kemnitz also points to relocation from a state that does recognize same-sex marriage to one that doesn’t, and vice-versa, as an additional layer of complication.
“The discrepancy between filing at the federal and filing at the state level gets trickier if you’ve moved from a state that does recognize same-sex marriage to a state that doesn’t, or vice versa, or if you have business interests in a third state,” she says. “You’ll have to file in each of those states and navigate the particular challenges each state’s laws provide.”
Far-reaching Consequences
Changes to marriage law don’t only affect taxes, of course. Nellen encourages same-sex couples to regularly review all of their benefit plans and insurance policies and check with their employer to make sure they’re getting the broadest extent of benefits.
“If they took their job at a time when the federal government wasn’t recognizing same-sex marriage, it’s possible they had to forego certain benefits for their spouse because the employer wasn’t obligated to provide it to same-sex couples,” Nellen says. “If you’ve been with your company for a long time, be proactive about checking with your human resources department to make sure you and your partner are receiving everything you’re entitled to.”
This advice applies even in states that don’t officially recognize same-sex marriage, because employer policies may have changed, and the level of recognition for domestic partnerships may have increased.
Where to Find Resources
When asked if there are any local tax resource organizations for same-sex couples, Kemnitz laughs. “I’d love to say that that’s the case, and maybe someday we’ll get there, but right now, we’re all just trying to figure it out as we go along,” she says.
The IRS has resources for same-sex couples on its website. Many state tax boards offer guidelines. Kemnitz’s group, The LGBT Bar Association, maintains a LGBT tax resource that is updated as their lawyers from all states learn about the newest laws.
“If you’re looking at FAQs or other information on a website, like the IRS or Treasury, you shouldn’t say, ‘Oh I looked at it six months ago,'” Nellen says. “If you have questions and you don’t think they were addressed, go back, because these pages continue to get updated.”
More from U.S. News
5 Scary Consequences of Failing to File Your Taxes
How Sudden Windfalls Can Impact Your Taxes
5 Things Newlyweds Need to Know About Taxes
Changing Legal Status Provides Extra Tax Challenges for Same-Sex Couples originally appeared on usnews.com
