IRS Warns Same-Sex Couples Not to File Joint Returns

March 2, 2006

WASHINGTON, DC—The Internal Revenue Service has begun warning tax preparers, businesses and state governments that same-sex couples legally married in Massachusetts or registered as domestic partners in states such as California and New Jersey must file separate income tax forms.

Citing the Federal Defense of Marriage Act, the IRS says that the US government does not recognize anything other than legally married opposite-sex couples.

The law allows straight couples who are married to divide their incomes when they file jointly, usually meaning a lower tax rate. Same-sex couples, even if registered as domestic partners, in civil unions, or in legally-recognized marriages, are not entitled to file their federal returns jointly, and attempts to file a joint returns could lead to fines or other penalties.

The IRS issued a similar warning soon after same-sex couples became able to marry in Massachusetts last year. Last year a federal judge dismissed a lawsuit filed by a gay couple in Minnesota claiming they deserved a tax refund because they were legally married and should be granted married taxpayer status.

People who receive health insurance from their state or local government or through their employer for their spouses or domestic partners are additionally hit with taxes. Employer-paid dependent health benefits are not taxed when it involves an opposite-sex married couple. But, since the IRS is unable to recognize same-sex relationships because of the federal Defense of Marriage Act, the benefits are considered imputed income to the extent the employer pays the benefit on behalf of the same-sex partner. In some cases the tax outweighs any savings.

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