The state of New York has been recognizing same-sex marriages from other states or countries for years. Soon, New Yorkers will not have to leave the state in order to enter into a legal marriage. But the state’s new law has another important impact as well. Same-sex married couples will, for the first time, be treated as married under the state income tax. Or will they?
Here’s the conundrum: Under current New York law, for purposes of filing state income tax returns, spousal status is determined under federal law. That rules is set forth in Section 607(b) of the Tax Law, which provides:
Marital or other status. An individual’s marital or other status under [state income tax provisions] shall be the same as his marital or other status for purposes of establishing the applicable federal income tax rates.
In 2006, The New York Department of Taxation and Revenue issued an opinion concluding that even though same-sex married couples might be recognized as married for other purposes of New York law, the tax statutes prevented them from being recognized as married for income tax purposes. Read that opinion here.
Yesterday the Governor signed a marriage bill that provides:
PARTIES TO A MARRIAGE.
1. A MARRIAGE THAT IS OTHERWISE VALID SHALL BE VALID REGARDLESS OF WHETHER THE PARTIES TO THE MARRIAGE ARE OF THE SAME OR DIFFERENT SEX.
2. NO GOVERNMENT TREATMENT OR LEGAL STATUS, EFFECT,RIGHT, BENEFIT, PRIVILEGE, PROTECTION OR RESPONSIBILITY RELATING TO MARRIAGE, WHETHER DERIVING FROM STATUTE, ADMINISTRATIVE OR COURT RULE,PUBLIC POLICY, COMMON LAW OR ANY OTHER SOURCE OF LAW, SHALL DIFFER BASED ON THE PARTIES TO THE MARRIAGE BEING OR HAVING BEEN OF THE SAME SEX RATHER THAN A DIFFERENT SEX. WHEN NECESSARY TO IMPLEMENT THE RIGHTS AND RESPONSIBILITIES OF SPOUSES UNDER THE LAW, ALL GENDER-SPECIFIC LANGUAGE OR TERMS SHALL BE CONSTRUED IN A GENDER-NEUTRAL MANNER IN ALL SUCH SOURCES OF LAW.
Presumably this new law requires a different construction of the state income tax statutes. But it would be helpful to have some clarification – either from the legislature or from the state tax agency. I expect that clarification will be in place before the 2011 tax return season begins.