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With the Supreme Court ruling same-sex marriage is a right for all married same-sex couples should know the tax benefits they will receive beginning this year.

The key with this decision is that all states will be required to follow the tax and probate rules for Federal as well as the original states that allowed same-sex marriages.  The issues over the past few years were that if you had married in a state that allowed same-sex marriage, such as California, but moved to Ohio, which did not recognized same-sex marriage,  couples would have had to file a “married” federal and  (two separate) “single” state returns.

 So, how does the Supreme Court ruling now impact same-sex married couples from a tax perspective?

• Same-sex couples can now file joint tax returns, for federal and state purposes (if applicable)           
  • The impact of this depends on a couples specific income situation, with the largest benefit coming to higher tax bracket couples, when one spouse earns 100% of the income.  If both spouses share income 50/50 the impact is $0.  As is the case for heterosexual couples, same-sex couples would want to run the numbers to see if it is more tax advantageous to file jointly or as a married couple filing separately. 
  • When filing jointly, tax preparation typically costs less than when filing two separate returns.
  • Same-sex couples are now allowed to have family coverage for their health insurance.
  • Same-sex couple Social Security benefits are now available to surviving spouses.

Most of the estate and gift tax advantages for same-sex couples came into effect in 2013 when Defense of Marriage Act (DOMA)  was struck down, so it is important for us to mention the “then” vs. “now:”

DOMA (2013) 
(Related read: Human Rights Campaign on DOMA

• All married couples in every state can utilize the unlimited marital deduction during their lives and at death
• All married couples can use “portability” to pass the first spouse’s unused lifetime exemption to the surviving spouse
• All married couples can take advantage of “gift-splitting”.  In other words, one spouse can give $28,000 to someone in 2015 and, if elected, can split that $28,000 between the two spouses (Estate, gift and trust: learn more)

2015

• All states will accept surviving spouse as legal beneficiaries if the decedent passed without a Last Will.
• Ohio taxpayers will be allowed to file as “Married Filing Joint.”
• Health decisions when Health Care Power of Attorneys and Living Wills are not executed will allow same-sex spouse to make decisions, although it is always recommended to have those documents completed.

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