Tax Returns for the Gay and Married

Second Parent Adoption Tax Credit

Tax season sucks. For anyone. But when you are a gay couple, married in the eyes of your state but not of your country, it sucks even worse.

I am lucky to live in one of the ten great states (including DC) that allow gay couples to wed. One of the many benefits that supposedly comes with marriage is the ability to file a joint tax return with my spouse, right? Sort of.

Because of the so-called Defense of Marriage Act, the Federal government doesn’t recognize our marriage. So although we can file as “married” for our New York State tax returns, we are forced to each have file as “single” for our Federal tax returns, restricting us from taking advantage of the many tax credits and benefits that are only available to married couples. So, what are we missing out on? Well, I’m no accountant, but for one, there is obviously less cost and time involved to complete one joint return as opposed to two single returns. As for benefits of being married, married couples can receive the “largest standard deduction,” which reduces the income amount subject to tax if the couple is not claiming itemized deductions. Being married also affects retirement savings. Under normal circumstances, you can only deduct contributions that you make to your own IRA, not someone else’s. But married couples can pay money into their spouse’s IRA and deduct up to $10,000 on their joint tax return. Then there are also the “gift tax” and “federal estate (or ‘death’) taxes,” of which married couples are exempt. Whether you are dead or alive, married folks can transfer an unlimited amount of assets to their spouses without paying a cent in federal estate tax. The IRS calls this the marital deduction, but gay married couples must pay this in full. (This issue is at the heart of one of the DOMA cases facing the Supreme Court this spring.)
Aside from not being able to take advantage of all of the marital benefits, doing gay taxes takes forever. Last year, my partner and I literally filled out our tax returns forms six times. Turbo Tax actually instructs gay couples to first fill out a FAKE “married filing jointly” federal tax return (but don’t hit submit!) in order for the software to populate the joint state return (NY in our case). So we did this. Then we had to go back to each separately file a federal tax return under “single.” We own rental property together but because we can’t file jointly, only one of us can claim it. So I filled out one return putting the property on mine. Then one without the property. Then she did the same. I couldn’t think of a better way to spend an entire weekend. But since we are forced to file separately, you better believe we are going to take advantage of being able to choose how we split things up.

To complicate things even more (in so many ways!), this year we had a baby. Although I carried her around for 9 months and stay home to care for her everyday, I cannot claim her as my dependent if we want my partner (who second-parent adopted our daughter) to file for the adoption tax credit. My partner was also forced to answer demoralizing questions for a parent such as “How many nights did the child stay with you? How many nights did she stay with the other parent? Did the other parent agree to let you claim this child as a dependent? Did you discuss with the other parent that you would be claiming the child as a dependent?” Um, duh!

As frustrating and nonsensical the questions are, however, second parent adoption is actually one benefit that same-sex partners can enjoy that married couples cannot. Normally, one spouse cannot claim an adoption credit when adopting the other spouse’s child. But because we are not spouses under Federal law, this limitation doesn’t apply to us. Cha-ching! It’s always rewarding to find loopholes that benefit us while they are trying their hardest to screw us. Thanks for contributing to our daughter’s college fund, Boehner!

My advice for the other gay sort-of-married couples out there? Until DOMA is repealed this spring (hey, I can dream), be patient, play the game, and take advantage of the few benefits that filing as single might offer.

Here are some other FAQs for same-sex couples from the IRS’s website.

Leave a Comment

The material on this web site is provided for educational purposes only, and is not to be used for medical advice, diagnosis or treatment or legal opinions. It's Conceivable provides stories and articles for informational purposes only—please do not consider it as legally-binding advice of any kind and consult your own medical professional or attorney.