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Same Sex Married Couples: Equal Federal Taxation Treatment

On Behalf of | Sep 19, 2013 | Same Sex/LGBTQ Couples

Equal Federal Taxation Treatment for Same Sex Married Couples

On August 29, 2013, the U.S. Treasury Department and the IRS issued a press release, stating that all same-sex married couples who are legally married in a jurisdiction that recognizes same-sex marriage, will be treated as married couples for federal taxation purposes. This is huge. This decision to treat all married couples the same for federal tax purposes is a major change, and it’s one of the first to occur after the U.S. Supreme Court struck down the Defense of Marriage Act in June of this year. 

What does this mean for same-sex couples living in Pennsylvania? Currently, Pennsylvania law states:

“It is hereby declared to be the strong and longstanding public policy of this Commonwealth that marriage shall be between one man and one woman. A marriage between persons of the same sex which was entered into in another state or foreign jurisdiction, even if valid where entered into, shall be void in this Commonwealth.” 23 Pa. C.S. §1704

In other words, Pennsylvania law does not allow same-sex couples to marry, nor does it recognize same-sex marriages that are valid in other states.

For same sex married couples living in Pennsylvania, who were married in say, Massachusetts, where same-sex marriage is legal, there will be a difference in their federal and state tax treatment. Since Pennsylvania does not yet grant same-sex couples the right to marry, nor recognize same-sex marriages from other states, for Pennsylvania taxation, a same-sex couple legally married in another state, but residing in Pennsylvania, may not claim any marital deductions, make elections, or receive any of the other treatment afforded to heterosexual married couples. For Federal taxation purposes, however, that same-sex couple, as long as they have a marriage certificate from a state that legally recognizes same-sex marriage, will be treated as a married couple for federal taxation purposes. This means that, for the first time ever, same-sex married couples will be permitted to file taxes jointly as a married couple, and that they will be entitled to a zero percent tax rate on any federal estate tax, and that they are now entitled to the same treatment as a heterosexual couple is.

With this Treasury Department and IRS decision, the Federal government has made a great leap forward in marriage equality. Unfortunately, Pennsylvania still has some catching up to do. Same-sex couples are still denied the right to marry and they continue to be denied equal treatment under the law of the Commonwealth. Change is on the horizon, however. The winds are blowing and indicate that someday, hopefully in the near future, Pennsylvania will recognize equal treatment for all couples.  If you have any questions on same sex couple’s rights, please call McMorrow Law, LLC at 724-940-0100.