IRS Gay Marriage Tax Issues Increased After Supreme Court DOMA Decision


IRS gay marriage taxes are increasing after the Supreme Court’s DOMA decision.

As previously reported by The Inquisitr, gay marriage in England is now legal thanks to Queen Elizabeth. No announcement has been made whether British gay couples will see their taxes rising, as well.

Starting April, 2014, same sex couples will be required to file a federal tax return with a married status. A cause for celebration, right? Well, the IRS tax code is complicated but now things are even more complicated.

37 out of 50 states ban gay marriage. The IRS isn’t sure yet whether the Supreme Court’s DOMA decision means only gay marriages in the other 13 states will be recognized for taxation purposes. There’s also the issue of civil unions.

The IRS typically has used each states’ definition for marriage, but if President Obama has his way the IRS will construe the word “spouse” to be based upon “personal beliefs,” meaning that all 50 states would require gay marriage taxes.

So what type of higher IRS taxes will gay marriages require? Under the current tax code, married couples suffer from a penalty because their combined incomes put them in a higher marginal tax rates. Previously, gay couples could file separately and could claim multiple credits only available to technical singles.

There’s also the possibility the IRS would require retroactive back taxes to be paid for three years. Elda Di Re, a partner at Ernst & Young in New York, thinks the IRS’ gay marriage decisions will be controversial:

“One of the biggest issues is what to do retroactively. One would think that the IRS will allow there to be filing refunds—but not mandate filing to pay additional tax.”

In Minnesota gay marriage will be legal come August 1 but the state’s Department of Revenue is unsure what to do about income taxes. Congress is already threatening to get involved in how the IRS’ gay marriage tax code will be implemented, so it’s possible there may be delays.

How do you think the IRS’ gay marriage taxes should be implemented?

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