Retroactive Tax Planning After Windsor

Brian P. LeBlanc, CPA, MBA, and Christine P. Andrews for the AICPA write: Retroactive Tax Planning After Windsor 

EXECUTIVE SUMMARY

Married same-sex couples must now file their federal income tax returns as either married filing jointly or separately, but they have a choice whether to amend their federal income tax returns for open years during which they were legally married. The tax return calculations have many variables, such as the allowance of certain credits, such as the adoption credit, which is now not permitted for same-sex married persons who adopt their spouse's biological child.        The article has specific examples of a same-sex couple and the different amounts of tax they would pay depending on whether they amend their prior-year returns. A tax return engagement usually does not begin with the question, "Should this couple amend prior-year returns?" But the Supreme Court's holding that Section 3 of the Defense of Marriage Act (DOMA)1 was unconstitutional triggers just this question for same-sex married couples. DOMA, which was enacted on Sept. 21, 1996, defined the word "marriage" as a legal union between one man and one woman as husband and wife. DOMA further defined the word "spouse" as a person of the opposite sex who is a husband or a wife. This legislation in effect barred federal recognition of same-sex marriages for all purposes, including Social Security survivors' benefits, insurance benefits, immigration, and income tax filing. [snip]   The article continues at the AICPA.org, click here to continue reading.