Not too long ago, the U.S. Supreme Court ruled that the portion of the Defense of Marriage Act that didn’t recognize state-sanctioned same-sex marriages was unconstitutional. As a result, federal benefits are available to same-sex couples who are married.
On top of that, the IRS recently ruled that it will considered same-sex couples who have been legally married eligible to file jointly. This ruling indicates that same-sex couples who were married in a state that recognizes same-sex marriage can file jointly, even if they currently live in a state that doesn’t recognize their union. (Civil unions and other domestic partnership arrangements are not recognized as “marriages” by the IRS.)
So, does this mean that same-sex couples who have had to file as single for the last few years should amend their tax returns so that they are filing jointly?
As always, the answer depends on your own situation.
Amending a Past Tax Return
Same-sex couples who have filed as single can amend their returns now to reflect their married status. However, amended returns are subject to the three- year statute of limitations. This means that you can only amend your tax returns back to tax year 2010 at this point.
You will need to make sure that you fill out the right tax form, and re-do all of your math to account for the fact that you and your spouse are combining finances. This can be a bit of a difficult process, but the reality is that some same-sex couples should have been receiving refunds in the past, since they should have been able to file jointly.
So, if you would have received a refund in 2010, 2011, and 2012 if you had been able to file jointly, rather than being forced to file as single, then it can make sense to amend your return and get that money you are entitled to.
Who is Likely to Benefit?
Run the numbers before you file your amended returns, though. The reality is that married filing jointly doesn’t automatically come with benefits. Whether or not it is worth it to amend the return to file jointly, rather than just leaving past tax returns be as single filings, often hinges on whether or not there is an income gap between you and your partner.
In most cases, married filing jointly only makes financial sense when there is a wide disparity in income — no matter your sexual orientation. If one partner makes a lot more than the other, filing jointly can be a great help, since it brings the higher-income partner down a tax bracket (or two).
On the other hand, the way some brackets are determined, and the way some credits and deductions are figured, filing jointly doesn’t offer a big advantage. For instance, there are some tax benefits that phase out those filing separately reach $200,000 a year. However, married couples don’t see phaseouts at double the income; they might begin phasing out at $250,000 a year. In cases like these, you might be better off keeping things separate.
High income couples, with similar incomes, are actually subject to a “marriage penalty.” If this describes you, amending your tax return doesn’t make sense, and it doesn’t make sense to file jointly.