Someday the Defense of Marriage Act will no longer exist. When that day comes, same-sex couples who are legally married in states that recognize gay marriage, such as Iowa, will likely be considered married for federal tax purposes.
But what about same-sex couples in legal relationships other than “marriages,” such as civil unions or registered domestic partnerships (RDPs)? The answer is a little less clear.
Generally, taxpayers are considered married for federal tax purposes if they are legally married in the state in which they live. Here is what Revenue Ruling 58-66 tells us:
The marital status of individuals as determined under state law is recognized in the administration of the Federal income tax laws. Therefore, if applicable state law recognizes common-law marriages, the status of individuals living in such relationship that the state would treat them as husband and wife is, for Federal income tax purposes, that of husband and wife.
Obviously the “husband and wife” part of that paragraph is problematic when talking about same-sex relationships, but I think the first sentence is really the key to the revenue ruling. The first sentence says state law rules the day and if taxpayers are treated as spouses at the state level, they are treated as married for federal tax purposes.
But where does that leave us with civil unions and RDPs? A letter ruling issued by the IRS Office of Chief Counsel in August may provide some insight. The letter was in response to a question about whether an opposite-sex couple in a civil union in Illinois would be considered married for tax purposes. The Chief Counsel said yes, that couple would be considered married because Illinois civil unions give couples “the same legal obligations, responsibilities, protections, and benefits as are afforded or recognized by the law of lllinois to spouses.”
The Chief Counsel letter was regarding opposite-sex civil unions but the same logic would probably be applied to same-sex couples if not for DOMA. So the answer is (as it always is with taxes) — “it depends.” It depends on if the state considers a civil union or RDP to be equivalent to marriage.
Professor Pat Cain covers the topic in greater depth in this blog post and she thinks that civil unions/RDPs do rise to the level of marriage for tax purposes.