IBJNews

Gay couples in Indiana could pay more for tax filings

Back to TopCommentsE-mailPrintBookmark and Share

Conflicting state and federal policies will likely cost Indiana same-sex couples more when they file their tax returns this year, experts say.

The Internal Revenue Service decided to recognize gay marriages after the U.S. Supreme Court struck down sections of the Defense of Marriage Act. But about half of the nation's states have not adopted the federal tax policy, and a measure introduced in the General Assembly last week is on track to ensure Indiana does not, either.

Department of Revenue spokesman Bob Dittmer said staff analyses show that keeping the current policy shouldn't cost the state or individuals more on actual taxes, but lawyers and accountants say the price tag for filing likely will be higher.

The split means Indiana same-sex couples who choose to take advantage of the new federal policy will have to prepare five tax returns this year: one jointly for federal taxes, two each to file separately for the state and two mock federal returns with the split assets, said John McGowan, who heads the lesbian, gay, bisexual and transgender practice at Northern Trust. The mock federal returns would be the basis for the separate state returns.

Each one can take time, and money, to prepare.

"That's one of the true burdens that same-sex couples face when they're living in a non-recognition state," McGowan said. "There are tangible costs associated with that."

Gay-marriage legalization advocates say about 11,000 same-sex couples live in Indiana, based on 2010 Census numbers.

Indianapolis resident Tim Orient said he expects to pay nearly twice the previous fees for his tax returns this year now that his marriage to his husband is recognized by the federal government. He said he spent about $400 on tax preparations for himself last year.

"We're very frustrated with all this," Orient said.

Splitting incomes for the state and joining them for the federal filings also could mean same-sex couples in states that don't recognize their marriages will be flagged for audits because each spouse will only report a fraction of their combined income to the state, said Anthony Infanti, a University of Pittsburgh law professor who specializes in tax issues for same-sex couples.

Dittmer said there are no concerns about Indiana same-sex couples being audited because of the new federal policy.

Indiana was on track to match IRS tax policies this year until Sen. Brandt Hershman, R-Buck Creek, made a late-session change that would prevent the state from adopting the same-sex marriage provision. Indiana does not recognize gay marriage.

Legislative negotiations on the bill — which would maintain current policy prohibiting same-sex married couples from filing joint state tax returns — are underway. Final approval from the General Assembly and Gov. Mike Pence is needed before the bill can become law.

Hershman says the changes would prevent conflicts between the state ban and tax code, which have led to lawsuits in other states.

"Frankly, that is a different issue for a different bill," Hershman said. "It would not be appropriate ... for us to adopt that change that would be in direct conflict with state law."

Missouri is recognizing same-sex marriages for tax purposes only, even though the state constitution bans the practice. Gov. Jay Nixon's executive order spurred lawsuits both by those hoping to legalize gay marriage in the state and those who say the measure is unconstitutional.

A Missouri House Republican last week filed a resolution to impeach Nixon for the order.

The rapid pace of changes to gay-marriage policies also means software companies have to monitor district courts and legislation closely, and Dittmer said there currently isn't a clear way to track whether same-sex couples are not filing jointly already in Indiana.

"The systems have not been able to keep up with the pace of these changes," McGowan said. "We're going to be operating on the honor system for some period of time before the system is enhanced to help enforce legislation and policies."

States with different same-sex marriage tax laws likely will unearth discrepancies and other complications with federal policy with time, Infanti said.

ADVERTISEMENT

  • Solution
    Scrap the entire tax code, implement a flat tax, get government out of marriage. Problem solved.
  • State Tax
    Curtains, you really don't have a choice. The federal return flows into the state return. To avoid completing the extra returns, the couple would need to file a joint state return that would raise a red flag.
  • I would not do it
    Honestly if I was in this situation I would consider not doing another return and using the federal return. For one the state says you have to do the seperate return but do not send it in, there is no way to match. Second how would the state take you to court for following the rules?

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    Subscribe to IBJ
    1. Uh, sorry Johnnie, but you are incorrect. Despite the assertions by yourself and various defenders and captains, sports attendance is NOT off significantly at most sporting events in the US. Variances in attendance has been in the range of single digits, both + & - for years now. MLB has had most of its best overall attendance nubers in the last decade, and that trend has been consistent for most major sporting events. The number one issue cited by most fans when asked about attendance is the overall cost of attending. The presence of HD and big screen televisions in home doesn't even register, as a factor for not attending an event. VALUE in the product is the key, and apparently is something lacking in the current ICS. What other explanation is there when with what is routinely touted as the "best" racing on the planet, fans are staying away in DROVES. A "close" title battle into the last event at Fontana, with the "cars and stars" of the ICS, and who showed up? MAYBE 8K. Sorry, but HD TV isn't to blame for that kind of fan apathy.

    2. Do you need finance to establish your business ? Are you interested in getting a loan at 3% from our private company? If so please Email: suntrust_oil@blumail.org

    3. If she was worth the $ the public outcry over direct tv dropping them would have kept them on their dishes as we have seen with other companies. I too quit watching channel 13 after she showed up since I left channel 8 because of her all show rather than production results. When Randy on 8 corrected her she had a big head and incorrectly challenged his correction for pronunciation of a city. Other antics while she matures was too much for me with her very inaccurate forecasts. All the forecasters were predicting rain until Thursday except Chris. They predicted sunny on Thursday but instead of rain until Thursday upon which the sun would finally make it out in full glory Chris was right on the money just as I too predicted looking at the radar on weather.gov. One thing I love about Angela is the fear you can see in her every time it thunders in the winter. It far exceeds the entertainment value of her body language (high heel noise drags, depression, etc) when her forecasts are so incorrect. Her hair stands on end, you have to see it!!!

    4. Good Day, Apply For A Loan I am Mr Fernadez Antonio, a private Loan lender and a cooperate financial for real estate and any kinds of business financing. I also offer Loans to individuals, Firms and cooperate bodies at 3% interest rate We offer any kind of loans. email us via fernadezloaninvest@outlook.com LOAN APPLICATION FORM First name:......................... Middle name:......................... Last name:........................................ Date of birth (yyyy-mm-dd):....................... Gender:........................................... Marital status:................................... Total Amount Needed............................... Loan Duration.................................... Address:.......................................... City:............................................. State/province:................................... Zip/postal code:.................................. Country:.......................................... Phone:............................................ Fax:.............................................. Mobile/cellular:.................................. Monthly Income.................................... Occupation:....................................... Best Regard, Mr Fernadez Antonio.

    5. i will love to share my testimony to you all the people in world i got married to my husband about 2 year ago we start having problems at home like we stop sleeping on the same bed,fighting about little things he always comes home late at night,drinking too much and sleeping with other women out side i have never love any man in my life except him. he is the father of my child and i don't want to loose him because we have worked so hard together to become what we are and have today .few month ago he now decided to live me and the kid,being a single mother can be hard sometimes and so i have nobody to turn to and i was heart broken.i called my mom and explain every thing to her,my mother told me about DR.okoro how he helped her solve the problem between her and my dad i was surprise about it because they have been without each other for three and a half years and it was like a miracle how they came back to each other. i was directed to DR. okoro on his email:okorospell@gmail.com and explain everything to him,so he promise me not to worry that he will cast a spell and make things come back to how we where so much in love again and that it was another female spirit that was controlling my husband he told me that my problem will be solved within two days if i believe i said OK So he cast a spell for me and after two days my love came back asking me to forgive him i Am so happy now. so that why i decided to share my experience with every body that have such problem contact Dr okoro the great spell caster on his email addresses spellcasterforlove@outlook.com

    ADVERTISEMENT