Mark Senick Attorney at Law

Income Tax Changes for California Same-Sex Married Couples and Registered Domestic Partners

As of June, 2013, with the Supreme Court decision striking down DOMA (the so-called Defense of Marriage Act), same-sex married spouses are treated exactly the same as opposite-sex married spouses because they are, in the eyes of the law, simply married.

However, California Registered Domestic Partners continue to come under IRS rules established in 2010. These rules do NOT apply to those persons who may be Registered Domestic Partners but are also married under California law, which would include those married in another jurisdiction allowing same-sex couples to marry, such as New York or France. Couples who are both registered and married are treated under the rules applying to married couples.

Under the rules established in May, 2010 by the IRS, the income of each partner is considered community property (which is the correct characterization under State law), and one-half of the total earnings of the couple must be reported on each return. The only exception would be if the couple entered into a legally enforceable agreement prior to registration or marriage which keeps the income of each party separate, and therefore no community property is created.

Such couples must continue to file separate returns. This can create many problems for tax preparers and filers.

If you are a registered domestic partner, and are using a tax preparer to assist you with your taxes, be sure he or she is familiar with the new rules and has communicated with other preparers who are assisting similar taxpayers so that he or she is well educated about this rule change.

While this change may be confusing at first, it may result in substantial tax savings for many couples. Couples may also amend past returns if it would be favorable to them.

California tax rules have long required same-sex married couples and registered domestic partners to file joint returns, and they should continue to do so.

Note: If you registered as domestic partners solely with a local municipality or a county, but not with the State of California, and are not married under the laws of the State of California, these new rules do not apply.