New York Offers Estate Tax Refund to Same-Sex Spouses

Last month’s Supreme Court decision in U.S. v. Windsor held section 3 of the Defense of Marriage Act to be unconstitutional.

As a result of the decision, New York State issued Technical Service Bureau Memorandum TSB-M-13(9)M to explain the effect of the decision for New York estate tax purposes. It says that as a result of the decision, for New York State estate tax purposes, estates of same-sex spouses are entitled to claim the same deductions and elections as estates of different-sex spouses, including the marital deduction, for all years open under the state of limitations (see DOMA Deciphered: What the Decision Means).

The memorandum notes that for New York estate tax purposes, equal treatment has been given to estates of individuals legally married to different-sex spouses and same-sex spouses since the enactment of the Marriage Equality Act, applicable to estates of individuals dying on or after July 24, 2011. As a result of the Supreme Court’s decision, this treatment now also applies to estates of individuals legally married to same-sex spouses who died prior to July 24, 2011.

Accordingly, because of the Windsor decision, affected taxpayers may amend any previously filed estate tax return where the state of limitations to apply for a refund remains open, typically three years from the date the original return was filed or two years from the date the tax was  paid. To amend an estate tax return, taxpayers should file Form ET-706, New York Estate Tax Return, following the directions given in TSB-M-11(8)M.