IRS Treatment of Same Sex Marriage For The Modern Family

October 4, 2013

One of the more popular shows on televisions is Modern Family.  For those of you who have not seen it, the comedy revolves around three interrelated households facing the trials and tribulations of "modern" life.  One of the households belong to Cam and Mitchell, two same-sex partners who have adopted an adorable little girl from Vietnam.  Now, while plotlines featuring them tend to be quite amusing, I can understand that how Cam and Mitchell file their taxes is probably not at the forefront of most viewers’ minds.  However, a recent decision by the Internal Revenue Service regarding its treatment of same-sex couples actually made me consider the notion.

The IRS has recently decided that, for federal tax purposes, it will recognize a same-sex marriage if it is valid where the marriage was entered into, regardless of where the couple actually resides.  This means that even though same-sex unions are not recognized in Pennsylvania, a same-sex couple living in Pennsylvania can be deemed married by the IRS as long as they obtain their marriage in another state where same-sex unions are legally recognized.

This means that legally married same-sex couples will be able to file their 2013 federal income tax returns using either the married filing jointly or married filing separately designations. In addition, they will also be able to file amended returns for prior tax years choosing to be treated as married during those years, as long as those years follow the date of the legal marriage. This treatment will be applied to all federal taxes, including estate, gift and generation skipping taxes. 

For Cam and Mitchell, the matter would be relatively simple because they live in California. Same sex marriages have been legal there ever since a June, 2013 decision by the United States Supreme Court upheld the decision of a lower court that stuck down Proposition 8, a state constitutional amendment barring same-sex marriages. Since then, legal same-sex marriages can and have been performed in California.

On the show, Cam and Mitchell are referred to as each other’s "partner", so the implication is that they are not legally married. Thus, all they need to do is get an official marriage license and they will then be able to file their federal taxes jointly (for those of you who haven’t seen this season’s first episode, I don’t want to spoil anything but rumor has it that wedding bells between Cam and Mitchell are in the works). However, if gay marriage were not legal in California, they would need to have a destination wedding in a state such as Massachusetts that recognizes same-sex marriage.

Please note that the IRS has stated that this treatment will only apply to legal same-sex marriages and not to registered domestic partnerships, civil unions, or similar formal relationships recognized under some state law as an alternative to marriage. In addition, the IRS’s policy will have no effect on state and local taxes.

Matthew Grosh is an attorney at Russell, Krafft & Gruber, LLP in Lancaster, Pennsylvania. He received his law degree and LL.M. in Taxation from Villanova University