Not only has the Department of Health and Human Services (DHS) announced that gay spouses are now eligible for certain Medicare benefits. The Treasury Department has also announced on Thursday that because the United States Supreme Court has struck down the Defense of Marriage Act (DOMA) the Internal Revenue Service (IRS) will now treat legally married, same-sex couples as married for federal tax purposes. This ruling will affect not only couples who reside in one of the thirteen states that currently recognize same sex marriages, but also states which do not recognize same-sex marriage.
The ruling will apply to all same-sex, legally married couples who live in every state including United State territories and the District of Columbia. The law will not, however, apply to other same sex relationships such as registered domestic partnerships or civil unions.
According to Treasury Secretary Jack Lew, “Today’s ruling provides certainty and clear, coherent tax filing guidance for all legally married same-sex couples nationwide. It provides access to benefits, responsibilities and protections under federal tax law that all Americans deserve.”
How do I file my tax returns with the IRS?
If you are a same-sex, legally married couple you must file your 2013 federal taxes as “married filing jointly” or “married filing separately.” Legally married couples may also be able to claim refunds for years 2010, 2011 and 2012, assuming they are eligible, if they complete an amended return and file it with the Internal Revenue Service (IRS).
Same-sex, married couples may also save money for their health insurance. Because of the Treasury Departments ruling, spouses who may have been subject to income tax when they were buying spousal coverage in an employer-sponsored plan may have that money treated as tax free for federal income tax purposes. Premiums often totaled thousands of dollars each year and resulted in significantly bigger tax bills so this is good news for most couples. Refunds for previously paid coverage premiums may also be available.
Other benefits from the ruling include more favorable treatment for inheriting property tax free from their spouse.
Is it all good news?
Change is not always good. Now legally married, same-sex couples may find they are subject to the marriage “penalty.” Like opposite sex couples, same sex couples may find that if they file jointly they could end up with a higher tax payment then they would have had if they had filed alone. The IRS warns that couples may want to talk to an accountant before filing any amended returns. Although they do not HAVE to file amended returns, which may be good news, going forward they won’t have a choice but to file married returns.
Who do I contact if I have questions for the IRS?
Individuals or couples who have questions about the new rulings can call the IRS for assistance Toll-Free at 1-800-829-1040. There hours of operation are Monday – Friday, 7:00 a.m. – 7:00 p.m. your local time (Alaska & Hawaii follow Pacific Time).
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