Since DOMA was overturned same-sex couples who had previously been treated as separate individuals may now be able to go back retroactively and alter the consequences of prior year tax treatment. Married same-sex couples should now be able to file amended income tax returns to file as married couples filing jointly. To be able to amend the previous year’s tax returns the couple would need to be married during the years they intend to amend the return.
The same applies if one member of the couple had filed as head of household (with children in the house). The couple would now file as joint with dependents.
Federal income tax law allows one to amend up to three years worth of previously filed tax returns. Which means same-sex couples could amend 2010, 2011 and 2012. To amend 2010 the amendment must be filed by April 15, 2014, April 15, 2015 for 2011 and April 15, 2016 for 2012.
It is important to note it may not always be better to file as married as the tax law has “marriage penalties.” However, total tax liabilities are usually lower, especially when there is a significant disparity in income between the couple. It is necessary to have a CPA or Enrolled Agent calculate the benefit of amending the return as well as filing as married going forward.
It is also important to note that you don’t have to amend all three years returns. It may make sense to only amend certain returns for 2010, 2011 and 2012. Furthermore, there is some benefit to waiting until the deadline to file the amendment as there still may be some tax ruling that take place surrounding DOMA and the impact on same-sex couples.
An additional benefit to waiting to file the amended return is the interest rate the IRS has to pay you for overpayment of taxes. Under IRS Revenue Ruling 2013-6 the interest rate the IRS credits you at is 3% plus the current Federal Short-Term Rate (0.22%). 3.22% is a better interest rate than most short term CDs!!!