Same-sex Couples and Idaho Income Tax Filing
On August 29, 2013, the Internal Revenue Service (IRS) ruled that same-sex couples who are legally married in a state that recognizes same-sex marriage can file federal tax returns with a married status.
However, Idaho’s Constitution and law recognize marriage as a contract between a man and a woman. Therefore, if you’re in a same-sex marriage and may file as “married filing jointly” with the IRS, you must file as single or head of household (if qualified) when you file your Idaho income tax return, even if:
- your same-sex marriage is recognized in other states
- you moved to Idaho from a state that recognizes your marriage
- you were a resident for part of the year in a state that recognizes your marriage
- you are a nonresident who is required to file and lives in a state that recognizes your marriage
- you had someone in Idaho perform the ceremony
Idaho doesn’t conform to every provision in the Internal Revenue Code (IRC) or to all of its associated regulations and rulings. With respect to the filing of joint returns, Idaho law overrules the IRS ruling and determines who should file a joint return.
The Idaho State Tax Commission must administer state law according to the Idaho Constitution and tax laws enacted by the Idaho Legislature. The Tax Commission expects all Idaho taxpayers to file their tax returns following the state’s laws and rules. If a same-sex couple files a joint tax return, the couple is not complying with the law and the return is subject to review and adjustment.
If you are in a same-sex marriage recognized in a different jurisdiction, you and your partner must:
- Recompute your federal income tax return as if you had used either single (or head of household, if qualified) filing status, and
- File separate Idaho income tax returns, either as single or head of household (if qualified), and
- Include the computations or your recomputed federal return with your Idaho Form 40 (resident) or Form 43 (nonresident or part-year resident) tax return.
You may not file as “married filing separately” on your Idaho income tax return.
Consult IRS section 152 to determine who can be claimed as a dependent.
A dependent child of same-sex parents legally married in another state may be claimed if:
- The parent meets the support test,
- The child meets the gross income test, and
- The child doesn’t file a joint return with his or her spouse.
Because the same-sex marriage isn’t recognized by Idaho, there can be no community property. Therefore, only the income earned by the individual filing the return should be reported on the Idaho income tax return. If you have jointly owned assets that generate income or other income subject to tax, allocate that income on your Idaho return using any reasonable basis, such as ownership interest.
Itemized or standard deductions
Since you’re filing as single (or head of household, if qualified), you should take whichever deduction best fits your situation. If a mortgage is in one name or one person had high medical expenses, that person might benefit by taking the itemized deduction. The other person may choose to take the standard deduction.
Other deductions or credits
Since you’re filing as single (or head of household, if qualified), you should take whichever deductions or credits that best fit your situation.
The IRS is accepting amended returns for previous years; however, because Idaho’s Constitution and laws don’t recognize same-sex marriages, amended returns can’t be filed with Idaho.
E-filing software companies have adapted federal and state filing requirements to their software. Most vendors will include a question about same-sex status and will create a return based on the state’s filing requirements.
Larger vendors will accommodate e-filing of both federal and state returns, while smaller vendors may require taxpayers to complete and submit paper returns for Idaho the first year.
The recomputed Fed/State return should pass through the e-file system if the return is sent unlinked, and will not be rejected at the federal level as a duplicate.
If you have questions, consult with a tax practitioner or contact us.