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SCOTUS Same-Sex Ruling: Tax Implications

July 1st, 2015 by Melissa Rager

At this point you’ve heard about the Supreme Court’s ruling on same-sex marriage equality, that or you’ve been living under a rock the past few days.  There have been numerous articles, blogs, and posts on the subject, especially by those individuals who now think they are experts on the subject (i.e. thank you continual Facebook commentary). We’re here to give you the facts.  So political opinion aside, the below summary highlights some of the main tax implications from this ruling.

Tax Filing Simplification – Prior to this ruling, same-sex married couples who lived in a state that recognized same-sex marriage were required to still file separate Federal returns.  Long gone are the days of creating a “dummy” federal return for those states that begin their income tax calculation based off of the federal numbers.  However, the opposite may be true now due to Friday’s ruling.  Those couples who live in a state-sanctioned domestic partnership or civil union or similar arrangement, can’t file a joint federal return until they take that long walk down the aisle.

Tax Implications – The obvious adjustment is to your tax filing status, joint vs single, head of household, etc.  Some other adjustments will include the impact another taxpayer’s income has on your deductions and tax credits.  Many of these items are affected by dollar thresholds resulting in lower tax deductions and credits when your combined income exceeds those thresholds.  It does work both ways though, there are several credits that only married individuals can take advantage of, which will now be offered to same-sex marriages.  The other big benefit is for states that have an estate or gift tax, same-sex marriages are now eligible for their marital deductions or gift splitting abilities.

There are still questions to be answered regarding religious groups and certain tax exempt organizations.  These topics have already been generating buzz in the social media realm, and I’m sure it won’t be long before the government, most likely the Supreme Court, add further clarification to these questions.

As always, please consult your GBQ tax advisor if you have questions or need assistance.

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