CAN LGBTQ+ MARRIED COUPLES FILE FEDERAL TAXES JOINTLY?

 

It’s March, and as Benjamin Franklin famously stated, “…but in this world nothing can be said to be certain, except death and taxes.” So, like everyone else, you may be starting to work on your 2023 Federal Tax filing.   If you are both married and members of the LGBTQ+ community, this may pose some questions about filing jointly or separately.

Since the Supreme Court ruled that same-sex marriage was legally recognized in 2015, LGBTQ+ married couples could file their tax returns jointly or separately. But there are some important factors to consider when you do so.

First, you must be legally married to file jointly. Domestic partners and civil unions—although often considered legal relationships that are recognized on the state level, are not marriages and don’t qualify you to file federal taxes as a married couple.

The biggest difference between a civil union and a marriage is that a civil union is not recognized by the federal government. Therefore, you only get protection at a state level if you live in a state that recognizes civil unions.  The other difference is that while marriages are recognized by every state (if you get married in California it should be recognized in New York) civil unions are not. That means if you get a civil union certificate in one state and then move to another state you may not get the same benefits. This means you can only use the marriage designation (either joint or separate filing) for tax purposes if you are legally married.

For most married same-sex couples, they will see a lower tax bill as a result of the Supreme Court’s 2015 decision. That being said, those on the either ends of the income spectrum should be aware that this may not be true for them. Just like their non-LGBTQ+ counterparts, their tax liability may actually go up.

Married couples with a significant disparity in their incomes will likely reduce the amount of taxes they pay by filing jointly due to the marriage bonus.  However, couples where both partners are high-income earners may see their tax bill increase if they file jointly.   In this case, they should file separately.  Surprisingly, low-income earners may also see their tax bill increase if they file jointly. This is a result of their status resulting in limited or reduced tax credits for married couples.

Therefore, it is highly recommended that you consult a tax professional if you are a married LGBTQ+ couple before you file your 2023 Federal Tax Return. This will help ensure that you are getting the most benefit from your particular situation. Visit this Investopedia article to learn more.

Please note that this posting is provided for informational purposes and is not to be considered official tax advice.