t finally happened! In June 2015, the Supreme Court issued a decision expanding to all same-sex couples the constitutional right to marry, regardless of their state of residence. As a result, more Americans are recognized as married for purposes of income tax filing. The ruling also impacts entitlement to Social Security benefits or eligibility for Supplemental Security Income (SSI) payments.
Of course, it takes time to develop and enact policies and instructions to implement the Supreme Court decision. In the meantime, if you’re a spouse, divorced spouse, or surviving spouse of a same-sex marriage or non-marital legal same-sex relationship, you should apply right away for benefits. Applying now will preserve your filing date, protecting you against the loss of potential benefits.
So what about your income taxes? Married couples of any gender combination are required to file their income tax returns based on their marital status on December 31st, the last day of the tax year.
Sounds simple, right? Well, there are still some decisions to make. The rules are pretty complicated, so each situation requires some thought and review. Here are some general things to consider. Again, it’s complicated, so you might want to get advice from a qualified tax professional.
Married couples can select from two filing status options – “married filing jointly” (MFJ) or “married filing separately” (MFS). All newly married couples and couples whose tax situations have changed should determine which filing status results in the lower combined tax liability.
You can estimate your federal tax liability for MFJ or MFS by using your last filed tax return(s) as a guide and referring to information available at www.irs.gov. State and local income tax information is available on each jurisdiction’s website. Be aware that selecting the MFS filing status limits or eliminates some income tax deductions or credits that are allowed for married couples filing jointly.
Depending on the year in which you married, you may be able to amend prior year’s returns to claim the married filing status. Amending is not required, since doing so could result in a higher combined tax liability. If you decide to amend, it can be done up to three years after the original filing deadline (e.g., April 15, 2016, for tax years ending December 31, 2012).
If your marriage or right to marry was recognized by the June 2015 Supreme Court decision — Congratulations!
Now, start getting the financial benefits to which you are entitled!