Category Archives: Law and Legislation

Same-Sex Marriage in New York, Just in Time for Pride Weekend

The annual LGBT Pride Celebration in New York City will be a festive one this year in the wake of Friday’s passage of a same-sex marriage bill in the Empire State.  New York, the country’s most populous state, joins Connecticut, Iowa, Massachusetts, New Hampshire, Vermont, and the District of Columbia in offering full marriage equality to same-sex couples. New York’s  addition to this list doubles the number of American citizens living in marriage equality states.

Governor Mario Cuomo called New York “a beacon for social justice” after succeeding at bringing together Republican donors and reluctant lawmakers to gather the votes needed to pass the bill in a Republican-controlled Senate, ending up with a 33-29 vote.  A number of Republican lawmakers changed their votes from the last time New York voted on this issue in 2009, including state senator Roy McDonald, who resisted pressure from his party and did what he called, in a strong statement, “the right thing.”

New York has no residency requirement to get a marriage license . New Yorkers, and any same-sex couple traveling to New York, can marry there beginning July 24. That’s less than a month from now, so good luck to the wedding planners.

Tax Time Extra Complicated for Same-Sex Couples

Filing tax returns is not that much fun for anyone, except maybe General Electric. But for same-sex couples, tax time is fraught with complications unique to relationships that are recognized by the state but not by the IRS–except sometimes. Confused yet? You should be.

In general, the IRS doesn’t recognize same-sex marriages or marriage-equivalent domestic partnerships or civil unions for tax purposes. Same-sex spouses and registered partners must file their federal tax returns as single, even if they are allowed (or required) to file as married or partnered in the state in which they live. This results in many couples preparing dummy federal returns in order to have accurate information to put on their state returns–in other words, it results in them paying an expert tax preparer to run the numbers for a state return and a federal return that aren’t coordinated.

For married or registered same-sex couples living in the three community property states that recognize same-sex relationships–California, Nevada, and Washington–things just got even more complicated with the IRS’s decision that these folks must follow their states’ community property rules relating to income on their federal tax returns, while still filing the federal return as single, separate taxpayers.

This means that the couple must add up their combined incomes, divide the resulting amount in half, and each report half of the income on their federal returns. For many people this is good news, as the income averaging will mean that a higher earner might fall into a lower tax bracket. Experts say that most couples will benefit or break even, though couples who both earn close to the same amount won’t benefit and will pay more for tax preparation. However, couples who do benefit get an extra break–they can go back and amend their returns as far back as 2007 using the community property numbers. For some, this will create quite a windfall.

Most same-sex couples in community property states will need professional tax help–even self-help software Turbo-Tax recommends seeking personalized advice rather than using its tax program.