Leveraging IRS Recognition of Same-Sex Marriages for Income and Estate Tax Returns

Description

The IRS removed the tax uncertainty or aggravations confronting same-sex couples following the Supreme Court decision which invalidated the provision of DOMA that defined marriage. Now all same-sex couples who are legally married in any jurisdiction that recognizes such unions as marriage will be treated as married for federal tax purposes, regardless of their domicile state.

The ruling encompasses couples married in states or other countries where same-sex marriages are legal—but not couples joined through a state-sanctioned civil unions or domestic partnership registries unless the state recognizes such unions as marriage. The ruling is relevant for Form 1040A, 706 and 709 reporting.

The challenges and opportunities of this ruling are significant for tax preparers, particularly in working with clients who legally married elsewhere and are currently living in a state that does not recognize or bans same-sex marriages. For clients and tax preparers, the ruling could also represent a windfall since the IRS indicated it will accept amended returns for couples defined as married, generally up to three years back.

Listen as our panel outlines best practices for preparers to assist their same-sex married and unmarried partnered clients in light of these game-changing Court and IRS decisions. The panel will explore the unique reporting challenges for related state taxes in states that don't recognize same-sex marriages.