In a prior article, we discussed the three possible categories a married couple would fall into for tax purposes, which were:
- Married in, and currently domiciled in, a recognition state
- Domiciled in a non-recognition state and travels to another state to get married
- Married and domiciled in one state, then moves to a non-recognition state
At the time that article was published, there was still uncertainty as to whether the IRS would recognize marriages under the last two categories as valid. Today, the IRS answered that question via Rev. Rul. 2013-17 and, as we predicted, the IRS will recognize these marriages as such for tax purposes, largely based on Rev. Rul. 58-66.
Thus, same-sex couples legally married under the laws of jurisdictions that permit such marriages (including foreign countries), are considered legally married for tax purposes, regardless of where the couple lives. Note that this applies to marriages only; civil unions, registered domestic partnerships, and other such formal relationships under state law are excluded from this ruling.
The IRS provided additional guidance that legally married same-sex couples must file their 2013 returns as either joint or married filing separately, and that they may, but are not required to, file amended returns for all open years, which for most taxpayers is 2012 back to 2010 (2009 if that return was on extension; the statute for that return expires this October 15th).
This ruling is prospective, effective September 16, 2013. For 2012 tax returns yet to be filed, affected spouses either need to hurry up to get those in before this date, or file them as married filing separate or married filing joint. In cases where one spouse has filed and the other has not, the latter spouse can file his/her return prior to 9/16/2013 using the filing status as done in the past, or if filed after this date, must either file as married filing separately, or file jointly on an amended return with his/her spouse.
Clarity is still needed at the state level; stay tuned for updates.
For further information or to discuss your specific circumstances, please contact Larry Rubin, Aronson’s tax controversy practice lead at 301.231.6200, who is very familiar with the tax issues faced by same-sex couples.