After Obergefell, all states must recognize marriages of same-sex spouses. Presumably the effect of the opinion is retroactive. So, should spouses who have been filing state taxes as single amend their past returns and file as married? Answer: It depends. Here are some considerations:
- State income tax rates rarely have the built-in marriage penalty that exists at the federal level, so it may not be worth amending returns to file as married.
- But if employer provided health plan benefits for a same-sex spouse were taxed at the state level in the past, then it may be worth amending in order to save the taxes paid on that imputed income.
- The IRS issued clear guidance about amending federal returns after the federal DOMA was struck down in Windsor. The IRS ruling allowed great flexibility to same-sex spouses. They could amend or not, depending on whether filing as married helped them or hurt them. And, if they amended for one year they did not have to amend for all open years. If only one spouse wanted to amend he or she could do so even if the other spouse did not (the filing status in that case would be married filing separately). It is not clear whether the states that were forced to recognize marriage equality by the U.S. Supreme Court will be as supportive of same-sex spouses when it comes to state income tax issues. And they may not issue clear guidelines as quickly as the IRS did.
Bottom line: So long as a tax year is still open under the applicable statute of limitations, taxpayers should have a legal basis to file amended returns claiming they were married in that year. But, given the numerous glitches that many taxpayers experienced when they filed amended returns at the federal level after Windsor, there is no prediction that any amended state income tax returns will be accepted or that refunds will be calculated correctly.
