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Federal Income Tax Filing Options for LGBT Couples

Same-sex couples who are legally married, in a civil union, or in a registered domestic partnership must treat federal and state tax returns differently. Because the Internal Revenue Service (IRS) is a federal agency, it follows federal law (DOMA), not state law, when recognizing same-sex marriages or their legal equivalents (civil unions and domestic partnership registrations).

But state tax agencies in marriage equality states do recognize same-sex couples as married for tax purposes.

Your federal income tax options depend on your legal status and state of residence:

  • LGBT partners who live in states with LGBT marriage or equivalent rights and who have opted not to enter into a legal union.

  • LGBT partners who live in a non-marriage equality or equivalent state, whether or not the couple got married elsewhere.

    If your circumstances match one of these two options, the federal government deems you as unmarried for federal tax purposes. Because you’re in fact not married or your state doesn’t recognize your marriage, you must file your federal income tax return as a single person or as head of household (HOH).

  • LGBT partners who live in a marriage equality (or its equivalent) state who are married or otherwise legally united. If your circumstances mirror this category, your tax filing is more complicated. Why? Because the IRS follows the federal DOMA and, thus, even if you’re legally married, you and your partner can’t file your federal income tax returns as married couple.

    Instead, if you and your partner are in this category, do the following:

    • You must file federal income tax returns as single individuals (or as head of household if you have dependents).

    • In some states, you must file state income tax returns as married filing jointly or married filing separately, depending on which option results in a higher tax refund or lower tax penalty. In states offering less than marriage (civil unions or domestic partner registration), a couple may not even have the option of filing a state return using a married filing status.

When a heterosexual married couple fills out their federal income tax return, they must then transfer the figures generated on the form to their state income tax return. Conversely, in the bizarre world that is LGBT legal rights, because federal and state tax codes sometimes see the status of LGBT partners differently, gay and lesbian partners in this category may need to generate four separate tax returns:

  • Each partner must file an individual federal income tax return as single individuals or as HOH — that’s two separate forms. Because the federal government doesn’t recognize same-sex marriage, married gay and lesbian couples are required to file separate returns as single individuals.

    Of course, when you’re legally married you aren’t factually a single person; thus, the federal government is forcing you to lie on a tax form that also requires you to sign beneath a paragraph that warns you that the information you provide on the form is “to the best of your knowledge” true. Doesn’t that put LGBT couples in quite a pickle?

    Because you’re being forced to lie about your marital status on your federal tax return, some tax experts advise you to add a note after your signature that you are actually married but were forced to file as a single person because of DOMA. Of course you can’t do this if you file your forms electronically!

  • Using their combined income, deductions, and so forth, both partners should generate a mock federal income tax return showing figures that reflect a married filing jointly status — that’s three forms so far. You may create a mock (simply a regular old federal income tax return that is filled out but never submitted to the IRS) federal income tax return.

    What’s the reason for the mock return? In order to come up with the figures necessary to complete a joint state tax return, you first need to calculate what your federal tax return would have been if you were legally able to file it.

  • With the figures generated from the mock federal form, depending on their state’s law, the couple may or may not be required to file a state tax return as married filing jointly — and that is a total of four forms! The purpose of the mock form is to generate the accurate figures for a married filing jointly status to input into a state tax.

Professional tax preparers say that because of the additional paperwork, time, and detail required to complete them, the fee for preparing tax returns for LGBT partners can be more than double what it costs to prepare returns for a married opposite-sex couple.

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