Same-sex couples may receive tax break from $1.75 trillion social plan

The most recent version of the Build Back Better Act includes a possible tax break for same-sex married couples. Couples who were legally married under state law before 2010 could claim federal tax benefits that are unavailable under current rules. 

The revision would essentially let couples file amended tax returns for years as early as 2004, and after filing a joint federal return as a married couple, they could claim refunds and credits that may result in a net tax benefit.

Jeffrey Levine, an accountant and certified financial planner at Buckingham Wealth Partners in Long Island, New York, said, “It’d be pretty significant for some folks,” but not all married couples would benefit from filing a joint return instead of filing as single taxpayers.

A Supreme Court decision in 2013, United States v. Windsor, struck down part of the Defense of Marriage Act and resulted in the current gap in tax rules for same-sex married couples. The ruling required same-sex marriages to be recognized by the federal government in states where they were legal.

A summary of the Build Back Better Act indicated that following the Windsor case, the IRS issued guidance that allowed taxpayers to amend their tax returns with respect to their marital status, but only back to 2010 generally.

Same-sex marriage, however, was legal in five states (Connecticut, Iowa, Massachusetts, New Hampshire, and Vermont) as well as Washington, D.C., before 2010. Nationwide, same-sex marriage was legalized in 2015 after the Supreme Court ruling in Obergefell v. Hodges.

Director of federal tax policy at the Institute on Taxation and Economic Policy, Steve Wamhoff, said, “This is a fair thing to do. People were married [but] the federal government wasn’t recognizing their marriages.” Wamhoff also said that while the policy would be fair, it is questionable whether couples would make the effort to redo their tax returns to take advantage of the rules in large numbers.




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