The leaders of the lesbian, gay, bisexual and transgender (LGBT) practice group of Marcum, a US-based accounting and advisory firm, say there are significant tax implications from the decision by the US Supreme Court overturning the Defense of Marriage Act (DOMA).
By voiding the federal definition of marriage as being exclusively between a man and a woman, the Court enables legally married same-sex couples to receive the same tax treatment as heterosexual married couples under federal law.
“With the overturning of the Defense of Marriage Act (DOMA) by the US Supreme Court today, same-sex couples who were legally married in the 12 states that recognise their marriages, plus the District of Columbia, can now take advantage of the more than 1,100 federal benefits that heterosexual married couples have been entitled to. This includes joint federal tax returns, unlimited federal and state tax marital deductions, stretch rollovers for retirement plan distributions, social security benefits, portability of the unified credit and access to immigration laws pertaining to residency for a spouse. There is an opportunity to file amended individual income tax returns for same-sex married couples for any open statute years, normally three years from the filing date,” says Nanette Lee Miller (pictured), national leader of Marcum’s LGBT practice and West Coast partner-in-charge of assurance services.
“Estate tax returns may also be open to amendment. This is a huge planning opportunity, as most estate plans for same-sex married couples will need to be amended to take federal changes into account. It is also essential that wills, healthcare proxies, living wills and disposition of remains documents be reviewed and amended, as appropriate,” says Janis Cowhey McDonagh, a Marcum trusts and estates tax partner and East Coast leader of the firm’s LGBT practice.
“DOMA levels the playing field for same-sex married couples from a federal standpoint, but there are still 50 states with 50 different tax scenarios, so it is important for same-sex married couples to consult their tax advisers about the specifics of their personal situations,” Miller says.