This year New York passed the Marriage Equality Act which legalized same-sex marriages. The good news is that under all New York laws, same-sex married couples now have the same rights as heterosexual married couples. The bad news is that the federal government continues to inexplicably yet valiantly "defend" the institution of marriage from same-gender couples who love one another and wish to form a family. With almost half of marriages ending in divorce, heterosexual couples evidently do not appreciate all the Congressional efforts on their behalf.
All jokes aside, when it comes to taxes, same-sex married couples will unfortunately continue to feel like separate and unequal citizens in this state. For example, a heterosexual married couple residing in New York files its federal income tax return as "married filing jointly" or "married filing separately" and then uses the numbers on the federal return to compute its New York income tax. Same-sex married couples will now also be filing their New York income tax returns with a married status. However, since the IRS continues to ignore their marriage, tax season is about to become a lot more complicated for same-sex married couples.
First, each of the same-sex spouses will prepare and file a federal return as if they are not married. Then, the couple will have to prepare but not file a "dummy" federal income tax return as if the federal government recognized their marriage. They must then use the numbers from that unfiled federal "dummy" return to determine their New York State income tax. This will result in the preparation of at least four income tax returns for same-sex married residents of New York (double that of same-gender married couples filing jointly).
Thus, starting with the spring of 2012 and until the federal Defense of the Marriage Act is extinguished, same sex married couples will be forced to annually expend significantly more money and efforts on their income tax returns than their heterosexual counterparts.
Look for part 2 next week,
Lucy Lucy Kats is a member of Whiteman Osterman & Hanna LLP's Estate Planning and Administration Practice Group. She drafts estate planning documents, including wills, trusts, retirement plan and insurance beneficiary designations, powers of attorney, health care proxies, and living wills. She also supervises all aspects of estate and trust administration.