Gay Couple Recognition In All States For Federal Tax Purposes

The IRS and the Treasury Department has ruledthat legally married gay couples will be recognized as married for federal tax purposeseven in the states that do not allow gay marriage. This is the broadest changein the law since the Supreme Court struck down the 1996 Defense of Marriage Actin June. The decision left many unanswered questions, but answered many afterthe IRS’s ruling.

In 2013, gay married couples will no longer be permitted to filesingle tax returns. Gay couples can only file “married filing jointly” or “marriedfiling separately” federal tax returns. Treasury Secretary Jacob J. Lew explained, “this rulingalso assures legally married same-sex couples that they can move freelythroughout the country knowing that their federal filing status will notchange.”

However, the recent decision could have somehigher tax implications. Gay couples making roughly the same annual salary willprobably pay the marriage penalty, which would be much higher than if theyfiled a single tax return. Additionally, even though couples file federal taxreturns as married couples, they may still be required to file state returns asindividuals. 

See Annie Lowrey, I.R.S. to Recognize All Gay Marriages Regardless of State, New York Times, Aug. 29, 2013.

Special thanks to Naomi Cahn (John Theodore Fey Research Professor of Law, George Washington University School of Law) for bringing this article to my attention.