[IMGCAP(1)]A recent federal appeals court decision has same-sex couples taking note. In Windsor v United States, the court allowed an estate tax marital deduction to the surviving spouse of a same-sex couple, striking down the Defense of Marriage Act definition of marriage as unconstitutional.
DOMA is a federal law that defines marriage as the legal union of one man and one woman. This means that same-sex marriages are not recognized for federal purposes, including insurance benefits for government employees, Social Security survivor benefits, and the filing of joint tax returns.
The constitutionality of DOMA’s definition of marriage is expected to eventually be considered by the Supreme Court. If DOMA is found unconstitutional, same-sex married couples would be able to start filing joint federal returns, which will often mean a smaller tax bill. These couples would also be able to amend prior-year returns to claim Married status. The problem here is that amended returns must be filed by the later of three years from filing your return, or two years of having paid the tax. The window is closing on amending these 2009 returns.
With this in mind, these couples should consider filing a “Protective Claim for Refund.” This would lock in their right to potential refunds while the issue is evolving in the legislature and winds its way through the judicial system. To file this protective claim, they simply file their amended return, and disclose that this is a protective claim based on Windsor v United States. Their claim would be held until the matter is finalized in the courts.
Aside from states that allow same-sex marriage, several other states allow same-sex couples to register as domestic partnerships or civil unions. There are some arguments that these couples would also be considered married if DOMA fails. These couples should also consider filing protective claims for refunds.
Lori Shrout, EA, is a manager at California-based CPA firm Gumbiner Savett Inc.