Democrats introduce bill for same-sex married couples filing amended tax returns

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A group of Democrats led by Sen. Elizabeth Warren, D-Mass., and House Ways and Means Committee ranking member Richard Neal, D-Mass., has introduced legislation to allow same-sex couples who were previously barred from filing taxes jointly to now submit amended returns dating back to the year of their marriage.

They were joined by 71 of their congressional colleagues in the Senate and the House in introducing the Refund Equality Act last week. The legislation would ensure that legally married same-sex couples, who until the Supreme Court’s 2013 landmark decision in the case of U.S. v. Windsor were barred from filing federal taxes jointly, could file amended returns going back to their marriage year.

Under current law, married couples who previously filed taxes separately are allowed to file amended joint returns dating back up to three years, but the IRS doesn’t have the authority to override this limitation. As a result, same-sex couples who were married in jurisdictions that recognized same-sex marriage before the Windsor decision can’t claim refunds for some of the years they were legally married. The Refund Equality Act would enable them to amend their tax returns for those years so they could file jointly and receive an estimated total of $67 million in tax refunds, according to Congress’s Joint Committee on Taxation.

“For nearly a decade, legally married same-sex couples had to file their taxes as single persons, often paying more taxes than they would owe if they could file as married,” Warren said in a statement. “This bill is a simple fix to allow same-sex couples to claim the tax refunds they earned but were denied because of who they love.”

The Refund Equality Act would create an exemption to the three-year limitation period in the Tax Code that would allow married same-sex couples to file for federal income tax adjustments back to the date of marriage. Under the Refund Equality Act, an amended return for a past year could be filed up to the due date for the tax return for the year in which the provision is enacted.

The Tax Code already includes several exemptions to the three-year limitations period, ranging from adjustments to capital loss carryback to adjustments for retired military service members who receive an award of disability compensation, the bill’s proponents noted in a fact sheet. Given these other exemptions, they believe a limited exemption for married same-sex couples, who can’t file tax returns as married couples because of a law that has been ruled unconstitutional (the Defense of Marriage Act in the Supreme Court’s Windsor decision), is justified.

“All legally married couples in this country deserve to be treated equally,” Neal said in a statement. “This bill would codify into law an important correction that would enable same-sex married couples to go back and claim the tax refunds and credits for which they qualify. The Supreme Court has ruled as such, and now it's time for Congress to act and make sure all Americans are treated with the fairness and equality they deserve under the law.”

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Finance, investment and tax-related legislation Tax returns Tax breaks