Supreme Court Doma Decision Could Have Tax Implications

On Friday, the nine justices of the Supreme Court held a closed session to determine whether they will or will not hear arguments in several cases related to the same central question: Should the Defense of Marriage Act (DOMA) be struck down? The justices are expected to entertain the underlying question, regardless of which cases they choose to accept. Should the Supreme Court strike down DOMA, the decision could have major tax law implications.

DOMA, which was passed in 1996, insists that the federal government may not recognize same-sex marriages. One practical result of this law is that those same-sex couples who have been allowed to marry under various state laws are not recognized as married for the purposes of filing federal taxes.

Given the marriage-related benefits of filing as "married," a reversal of DOMA could result in major tax benefits for same-sex couples who cannot currently take advantage of them. In addition, these couples will need to reevaluate the ways in which they approach their personal and business taxes if they decide to file jointly. And in one happy surprise, married same-sex couples might be able to immediately qualify for federal income or estate tax refunds dating back to 2009 if they amend their returns through a protective claim.

At present, tax law issues affecting married and unmarried same-sex couples can be particularly complicated. If you have questions about how your relationship may or may not impact your taxes this coming year, please consult the expertise of an experienced attorney.

Source: KECQ, "Same-sex couples could see tax windfalls," Blake Ellis, Nov. 14, 2012