Resources on States Conformity on DOMA Filing Issues for Same-Sex Couples 


    NOTE:  The information on this page was compiled from information as of various dates and various sources that are noted.  This is a rapidly changing area of law and guidance, so the information on this webpage should be confirmed with the specific states to make sure that it this is the most up-to-date information. 

    This page covers various issues regarding state tax conformity to the federal rules for same-sex couples, including: 

     

    Filing State Tax Returns Depend on State of Residency

    For federal tax purposes, the IRS has now announced that same-sex couples married in a jurisdiction that permits such marriages will be treated as married for federal tax purposes, even if they live in a jurisdiction that does not recognize such marriages.

    However, completing a state tax return depends on where the same-sex married couple lives. The issue arises because most states use a federal definition of income (either federal adjusted gross income or federal taxable income) for purposes of calculating state income taxes.

    If the same-sex married couple lives in a state that recognizes same-sex marriages, the couple must fill out the tax return as a married couple for state and federal purposes and follow tax rules that apply to married couples.

    If the couple lives in a state that does not recognize same-sex marriages, the spouses must fill out a Federal income tax return as a married couple for federal purposes and follow federal tax rules that apply to married couples. For state taxes, generally the couple will need to file as two single people and follow state tax rules that apply to single people. However, there are exceptions, such as Missouri, where the governor signed an executive order to allow same-sex couples to file jointly for state tax purposes.

    For civil unions or domestic partnerships, if the state allows the filing of a married filing joint state return for tax purposes, such individuals would not be considered married for federal tax purposes and individuals in those statuses may not file as married filing jointly for federal tax purposes.  For example, couples in Illinois civil unions are required to file Illinois state tax returns as married, even though for federal purposes, the civil union is not recognized as married so the returns must be filed as Single for federal purposes. 

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    Resources and links to twenty-four non-Recognition States' Issued Filing Guidance for Same-Sex Couples regarding DOMA Conformity to IRS and Federal Tax Treatment (as of Jan. 6, 2014)

    Below is a listing of the 25 states that DO NOT recognize same-sex marriage (or civil unions or domestic partnerships) and have issued some sort of guidance regarding reporting state income taxes for same-sex married couples.

    • Five states allow same-sex taxpayers to file jointly (Colorado, Illinois, Missouri, Oregon, and Utah).
    • Five states instruct same-sex taxpayers to allocate income to two single returns using state-provided schedule (Arizona, Kansas, North Dakota, Ohio, and Wisconsin).
    • Twelve states instruct same-sex taxpayers to complete pro forma federal single tax returns and use that information for the state returns (Georgia, Idaho, Indiana, Kentucky, Louisiana, Michigan, Nebraska, North Carolina, Oklahoma, South Carolina, Virginia, and West Virginia). These "dummy" federal tax returns are not filed with federal authorities but used only for calculating state tax liability (Utah also issued guidance using this approach prior to the Dec. 2013 court decision permitting same-sex marriage in the state).
    • One state (Alabama) instructs same-sex taxpayers to apportion income according to a ratio.
    • Montana advises same-sex taxpayers not to file jointly but concedes that it has no way of verifying that information.
    • Note that Illinois has passed legislation to recognize same sex marriage as of June 1, 2014, and treats couples as married if treated as married for Federal purposes.
    • No guidance from Arkansas as of now.  No IRC conformity, no same-sex marriage, highly likely must file as single or Head of Household (HOH).
    Below are links to the specific state guidance:
    • Alabama*** (file as single and attach first two pages of federal return when file Alabama returns)
    • Arizona
    • Colorado* - same sex couples may file as married for state tax purposes - SB 19 enacted.
    • Georgia
    • Idaho (and Dec. 2013 update and Feb. 2014 update - Idaho legislature passes bill banning joint returns for married same-sex couples) (include dummy federal single tax returns as part of  paperwork for Idaho returns)
    • Illinois*, ***** - recognizes as married if married for Federal purposes.  Passed legislation to recognize same sex marriages after June 1, 2014. (If in Illinois civil unions, file as Single for federal and married for Illinois purposes.)
    • Indiana
    • Kansas
    • Kentucky (separate credits and itemized deductions according to which spouse would benefit most) (Feb. 2014 update - Court rules Kentucky must recognize same-sex marriages from other states)
    • Louisiana
    • Michigan**, *** - see MCL 203.311 (note on 3/21/14, federal judge ruled Michigan's ban on same-sex marriage is unconstitutional. The ruling is expected to be appealed.)
    • Mississippi*** - does not conform to the Federal rules/IRS for filing status
    • Missouri* - Governor's executive order allows same-sex couples to file as married for state tax purposes. Note that a lawsuit challenging the filing of Missouri married tax returns for same-sex couples was filed as noted in news articles on Jan. 9, 2014.
    • Montana 
    • Nebraska 
    • North Carolina and directive
    • North Dakota -and allocation form Schedule ND-1S
    • Ohio
    • Oklahoma - Note on Jan. 14, 2014, a federal judge struck down Oklahoma's ban on same-sex marriage, saying it violates the U.S. Constitution. The judge said, however, that same-sex marriage in Oklahoma will not start immediately and that the effect of the ruling will be stayed pending an appeal of his decision to a higher court. 
    • Oregon* - recognizes civil unions/registered domestic partnerships, same sex couples may file as married for state tax purposes
    • Pennsylvania**, ***
    • South Carolina (and Form instructions)
    • Utah****
    • West Virginia - file as single
    • Virginia - Note on Jan. 10, 2014, the Virginia Attorney General wrote that allowing Virginia married tax returns for same-sex couples in Virginia would violate the Virginia Constitution, and on Jan. 23, 2014, announced that Virginia will not defend the State's Consitutional ban on same-sex marriage when it is considered in federal court in a week.  On Feb. 13, 2014, a federal court judge ruled the Virginia state's ban on same-sex marriage is unconstitutional. 
    • Wisconsin  - AICPA suggests that section 736 payments from partnerships should not be subject to 3.8% surtax on net investment income (NII) in August 1 letter to IRS and Treasury

    * These 5 states (Colorado, Illinois, Missouri, Oregon, and Utah) allow same-sex couples who are legally married in other states to file married state tax returns in their state (even though these states do not recognize same sex marriage and Illinois passed legislation to recognize it June 1, 2014, and Utah is in the middle of court rulings on it). 

    **In Michigan and Pennsylvania, there is no separate rate structure for married couples, but marital status is used in calculating exemptions, taxability of employer-provided healthcare, and so on.

    *** In these states (Alabama, Michigan, Mississippi, and Pennsylvania) (and also Arkansas), same-sex marriage is not recognized and there is no conformity between federal and state taxes, so same-sex married couples will have to file as if they were single. Note: Michagan's ban on same-sex marriage was ruled unconstitutional by a federal judge on 3/21/14.

    **** This Utah Jan. 15, 2014 guidance allows joint filing for legally married same-sex couples (married in utah or other states), following the IRS ruling treatment. It supercedes the prior Nov. 18, 2013 guidance that is needed to be updated as the Federal court ruled on Dec. 20, 2013 that Utah's prohibition on same-sex marriage is unconstitutional and same-sex marriage licenses started to be issued. As of Dec. 31, 2013 (the date to determine marital status for 2013 taxes), a stay was NOT issued by any judge in this case, so as of Dec. 31, 2013, same-sex marriage was legal in Utah. However, on Jan. 6, 2014, the Supreme Court issued a stay in the case, blocking further same-sex marriages in Utah while state officials appeal the decision that allowed them. On Jan. 8, 2014, "Based on counsel from the Attorney General's Office regarding the Supreme Court decision, state recognition of same-sex marital status is ON HOLD until further notice." said the governor's Chief of Staff Derek Miller in a letter to cabinet officials. On Jan. 10, 2014, the U.S. Attorney has announced that "for purposes of federal law, these marriages (starting Dec. 20, 2013 in Utah) will be recognized as lawful and considered eligible for all relevant federal benefits on the same terms as other same-sex marriages," so federal married returns need to be filed for these couples. On Jan. 15, 2014, the Utah State Tax Commission released the notice of allowing joint filing and posted it on their website.

    *****Illinois – Same-sex marriage legal as of June 1, 2014, has allowed civil unions up to now, 2013 filing status provides if treated as spouses for federal income tax purposes, follow the instructions for married couples. If the couple are in a civil union that is not treated as a marriage for federal income tax purposes, Illinois still considers as spouses for Illinois Income Tax purposes. Follow the instructions for civil unions - in Step 1, Line C. (See page 4 of 2013 Illinois individual income tax return instructions.) For further information, see Section 502[c] of the Illinois Income Tax Act).

    For more details, see State Taxes and Married Same-Sex Couples, States Provide Income Tax Filing Guidance to Same-Sex Couples, and State Income Tax Filing Requirements.

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    Sixteen states (plus DC) recognize same-sex marriage - Married for Federal and State Tax Purposes

    The following sixteen states (plus DC) recognize same-sex marriage (as of Dec. 19, 2013), so 2013 state tax returns will follow federal marriage status:

    • California
    • Connecticut - see page 17 of the 2012 Instructions for Form CT-1040
    • Delaware - recognizes same-sex marriage as of July 1, 2013
    • District of Columbia
    • Hawaii - recognizes same-sex marriage as of Dec. 2, 2013
    • Iowa
    • Maine
    • Maryland
    • Massachusetts
    • Minnesota - recognizes same-sex marriage as of August, 1, 2013
    • New Hampshire - tax on interest and dividends only
    • New Mexico - recognizes same-sex marriage as of Dec. 19, 2013
    • New Jersey - recognizes same-sex marriage as of Oct. 21, 2013 (also see Civil Union Act) (married couples and those in civil unions can file as married, but those in registered domestic partnerships cannot)
    • New York
    • Rhode Island - recognizes same-sex marriage as of Aug. 1, 2013 (accepts same-sex marriages for tax filing but not civil unions)
    • Vermont (couples in civil unions must use the ‘civil union’ filing status on Vermont returns)
    • Washington - no state income tax

    2013 Legislative Recap:  Six of the above states (Delaware, Hawaii, Minnesota, New Mexico, New Jersey, and Rhode Island) began recognizing same-sex marriage in 2013. Illinois has passed legislation signed into law Nov. 20, 2013 that will recognize same-sex marriage as of June 1, 2014. 

    Note that in addition, four states (Colorado, Illinois (recognize as of June 1, 2014), Missouri, and Oregon) do not recognize same-sex marriage will allow same-sex couples legally married in another state to file as married for state tax purposes.

    Seventeen states and the District of Columbia issue licenses for same-sex marriage. Since December, bans on gay marriage have been overturned in Michigan, Oklahoma, Texas, Utah, and Virginia, but appeals have put those cases on hold.

    For more details, see State Income Tax Filing Requirements, State Taxes and Married Same-Sex Couples, and About.com.

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    Seven States with No State Filing Issues

    The following seven states do NOT recognize same-sex marriage, but have no state income tax - so it should NOT matter:

    • Alaska
    • Florida
    • Nevada
    • South Dakota
    • Tennessee - note that technically, there is a flat rate on interest and dividends, but marital status does not have any effect on rate or tax liability
    • Texas - Federal judge rules Unconstitutional the state's ban on same-sex marriage, pending appeal
    • Wyoming

    For more details, see State Taxes and Married Same-Sex Couples.

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    Twenty-two states that (as of Dec. 31, 2013) banned same-sex marriage and have State Income Tax Coupled (Reference) to the Federal Income Tax

    The twenty-two states that (as of Dec. 31, 2013) banned same-sex marriage and have state income tax coupled or reference to the federal income tax were:  Arizona, Colorado, Georgia, Idaho, Illinois (note:  Illinois enacted legislation Nov. 20, 2013 that will allow same same-sex marriage as of June 1, 2014), Indiana, Kansas, Kentucky, Louisiana, Michigan, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Virginia, West Virginia, and Wisconsin.

    Note that Utah was on this list as well until Dec. 20, 2013, when the Federal judge ruled that Utah's ban on same-sex marriage was unconstitutional. Since the Supreme Court has issued a stay on the case on June 6, 2014, pending further appeals, same-sex marriage is now banned in Utah, putting Utah back on the above list of states as of now.

    For more details, see Jan. 2014 Special Report and Tax Foundation, which was as of Aug. 29, 2013.

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    Community Property State Considerations

    Married couples who live in a community property state have additional considerations. If they file using the married filing separately filing status, they will need to report their income and deductions according to their state's community property laws. This applies to same-sex married couples who choose to filing separately and where one or both spouses lives in Washington, California or Nevada. Also, domestic partners and couples in a civil union may need to report their income and deductions using their state's community property laws. This impacts domestic partners in Washington, California, and Nevada.

    This is an evolving issue and laws can change quickly, so it is suggested to confirm with the state's tax authority for the rules in a specific state.

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    State Laws on Same-Sex Marriage and Federal Tax Conformity
    No State Individual Income Tax
    • Alaska
    • Florida
    • Nevada
    • South Dakota
    • Texas
    • Washington
    • Wyoming

    State Taxes Only Interest and Dividend Income
    • New Hampshire
    • Tennessee
    Starts with Federal Adjusted Gross Income, then Applies One Rate
    • Illinois
    • Indiana
    • New Mexico
    • Utah
    • North Carolina (in 2014)
    Starts with Federal Taxable Income, then Applies One Rate
    • Colorado
    Starts with Federal Taxable Income, then Applies Own Rates to Federal Brackets
    • North Dakota
    • Vermont
    Starts with Federal Taxable Income, then Applies Own Rates and Brackets
    • Minnesota
    • North Carolina (until 2014)
    • South Carolina
    Starts with Federal Adjusted Gross Income, then Applies Own Rates and Brackets
    • Arizona
    • California
    • Connecticut
    • Delaware
    • Georgia
    • Hawaii
    • Idaho
    • Kansas
    • Kentucky
    • Louisiana
    • Maine
    • Maryland
    • Missouri
    • Montana
    • Nebraska 
    • New Mexico 
    • New York
    • Ohio 
    • Oklahoma 
    • Oregon 
    • Rhode Island
    • Virginia
    • West Virginia
    • Wisconsin
    Starts with Federal Gross Income, then Applies Own Rate(s) and Bracket(s)
    • Massachusetts
    • District of Columbia
    Tax Calculation Does Not Reference Federal Return
    • Alabama
    • Arkansas
    • Mississippi
    • New Jersey
    • Pennsylvania
    Sources: Jan. 2014 Special Report and Tax Foundation review of state statutes.

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    Taxation of Estates or Property Left to Heirs

    Sixteen jurisdictions recognize (or have enacted legislation to recognize in 2014) same-sex marriage and collect estate tax, inheritance tax or both:

    • Connecticut: estate tax
    • Delaware: estate tax - recognizes same-sex marriage as of July 1, 2013
    • District of Columbia - estate tax
    • Hawaii: estate tax - recognizes same-sex marriage as of Dec. 2, 2013
    • Illinois: estate tax - enacted legislation Nov. 20, 2013 to recognize same-sex marriage as of June 1, 2014
    • Iowa - inheritance tax
    • Maine - estate tax
    • Maryland - estate tax and inheritance tax
    • Massachusetts - estate tax
    • Minnesota - estate tax (recognizes same-sex marriage as of Aug. 1, 2013)
    • New Jersey - estate tax and inheritance tax (recognizes same-sex marriage as of Oct. 21, 2013)
    • New Mexico - estate tax (recognizes same-sex marriage as of Dec. 19, 2013)
    • New York - estate tax
    • Rhode Island - estate tax (recognizes same-sex marriage as of Aug. 1, 2013)
    • Vermont - estate tax
    • Washington - estate tax

    One state allows same-sex domestic partnerships and collects estate tax

    • Oregon - estate tax
    Four states do not recognize same-sex marriage, civil unions or domestic partnerships and collect inheritance tax:

     

    • Kentucky - inheritance tax
    • Nebraska - inheritance tax
    • Pennsylvania - inheritance tax
    • Tennessee - inheritance tax

    Source:  Same Sex Married Couples and State Taxes.

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    Charts of All States and Each of the State's Tax Rules and Filing Options for Same-Sex Couples

    chart is available detailing each of the states and whether the state's state tax has conformity with the Internal Revenue Code (IRC) and the state's status regarding recognition/ban of same-sex relationships.  For conformity to the IRC, the chart details if the state conformity is rolling (state tax based on the current version of the IRC) or fixed date (state income tax based on the IRS as of a specific date chosen by the state legislature). 

    A chart is available of the state income tax filing requirements for same-sex couples - taxation and employee benefits - detailing each of the states and whether same-sex marriage is legal in the state, the individual income tax filing process for same-sex couples in that state, and the issued administrative guidance.

    Another chart is available detailing each of the states and whether the state Constitution bans same-sex marriage; whether the state recognizes same-sex marriages, civil unions or domestic partnerships within the state also from other jurisdictions; and the available filing status for such couples in each state.

    For more details, see State Taxes and Married Same-Sex Couples, State Income Tax Filing Requirements, and State Tax Filing Options for Same-Sex Couples (note this last source is as of Sept. 26, 2013)



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    Additional Resources and Articles

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    For more information, see the IRS webpage and the AICPA Same Sex Couples webpage and IRS webpage and the AICPA Same Sex Couples webpage and Estate Tax Impact of the DOMA Decision webpage.




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