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The Marriage Equality Act in New York

August 1st, 2011 No comments

On Friday, the New York State Department of Taxation and Finance issued a memorandum¬†highlighting some tax implications for same-sex married couples who will file in New York. Until federal law recognizes same sex marriages for tax purposes, it’s far from a straightforward situation.

For tax years ending on or after July 24, 2011 (effective date of The Marriage Equality Act), married same-sex couples filing in New York can file either a single joint state return or two married filing separately state returns. However, each spouse must file separate federal income tax returns, either as single or head of household.

Suppose a same-sex married couple seeks to file jointly in New York. That means an accountant must prepare three returns, right? Wrong. Four.

Many state individual income tax returns, if not all, require figures from the federal return for preparation. Essentially, an accountant must prepare a “dummy” joint federal income tax return (which is not actually filed), so that the proper federal numbers are transferred over to the joint state return.

More work for accountants, and additional headaches for same-sex married couples. A rather small price to pay for an otherwise major victory.

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