FINRA's BrokerCheck

Same-sex marriage and your taxes

In August 2013, the federal government ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. Previously, individuals affected by the Defense of Marriage Act (DOMA) were denied federal tax benefits that other married couples could receive. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.

DOMA gave states the right to refuse to recognize same-sex marriages that were granted under the law of other states. In June, 2013, the section of DOMA that granted states that right was declared unconstitutional.

The federal government's August ruling applies to all federal tax provisions where marriage is a factor, including:

  • Filing status
  • Claiming personal and dependency exemptions
  • Taking the standard deduction
  • Employee benefits
  • Contributing to an IRA
  • Claiming the earned income tax credit or child tax credit

Estate planning is another area that this ruling will affect. Same-sex spouses will now have more options that can be used to their advantage while assembling their estate plans. The marital deduction means that couples may transfer as much money as they'd like to their spouse without incurring federal estate or gift tax (however, the spouse must be a U.S. citizen). Portability is another tool which may prove advantageous; it allows a widow or widower the ability to use any unused estate tax exclusions from their spouse in addition to their own (this is currently capped at $5.25 million for 2013).

For those affected by the recent changes to DOMA, be sure to revisit for any additional changes or updates as they occur, or call 866.799.9580 to speak with an advisor.

See also: 

When Same-Sex Spouse Premiums Are Wrongly Included on a W-2 

IRS Clarifies Qualified Retirement Plan Rules for Same-Sex Couples

Retirement Plans: No Retroactivity on the Windsor Ruling

Tax Implications in the Supreme Court DOMA Case

Supreme Court Decision Will Have a Major Impact on Many Same-Sex Married Couples


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