On the immediate heels of the United States Supreme Court decision earlier this summer overturning the Defense of Marriage Act, and in an effort to create a degree of tax certainty following such ruling, the Department of Treasury and Internal Revenue Service announced that all legally married same-sex couples will be treated as married couples for federal tax purposes.
The ruling applies for all tax purposes where marriage is a factor, including income and gift and estate taxes. It also applies to couples who live in a state that does not recognize same-sex marriage, so long as they were legally married in a state that does. This provision of the announcement logically and practically allows such married couples to move anywhere in the country without concern that their federal filing status will change. On the other hand, one person under such circumstances would still have to file as an individual at the state level should he or she live in a state that does not have legalized same-sex marriage. Such couples will be able to file federal tax returns as “married filing jointly” or “married filing separately” for tax year 2013.
Importantly, however, this ruling does not apply to registered domestic partnerships, civil unions, or similarly formalized relationships recognized under state law. Thus, residents who entered into a domestic partnership or civil union in New Jersey will not enjoy the same benefit of the ruling. Ultimately, this announcement, which confirms that people in civil unions do not have protections equal to married couples, will likely come into play in the pending legal challenge to the New Jersey Civil Union law. Stay tuned to this blog for more information as it unfolds.