One Year Out: The Changing Tax Landscape in a Post-Windsor World

Today marks the one-year anniversary of the Supreme Court oral arguments in U.S. v. Windsor. Next month, many same-sex married couples will experience the impact of the June 2013 decision and the overturning of Section 3 of the Defense of Marriage Act (DOMA) when they file their taxes as “married” for the first time.

Although the reach of this decision extends to all federal recognition of same-sex marriage, Edie Windsor filed her case in New York to contest a $363,000 inheritance tax bill she received following the death of her longtime partner and spouse. Following the Supreme Court’ decision in June, the IRS published a revenue ruling providing that all same-sex married couples — regardless of where they live– will be considered “married” for federal tax purposes.  This decision will ensure that same-sex surviving spouses, like Edie, will be able to inherit and receive gifts from their spouse free from unfair tax burdens.

As a result of this ruling, married couples are required to file their taxes as either married filing jointly, or married filing separately.  Employer provided health care for a same-sex spouse will no longer be considered “imputed income” and subject to additional taxation. This can result in a huge tax savings for many families. Couples who have experienced this additional tax may be eligible for a refund and should consider filing amended returns.  Due to the persistent patchwork of state recognition laws, tax day this year will be more complicated for couples living in states that do not recognize their marriage.  Many couples will have to create multiple federal mock returns in order to file their state taxes as individuals.

HRC has created a set of resources available at HRC.org/taxes to provide couples with information about these changing state and federal requirements.