New IRS rule might mean tax break for same-sex couples

[Anywho6]

New IRS rule might mean tax break for same-sex couples
McClatchy Newspapers
Published Wednesday, Feb. 23, 2011

SACRAMENTO, Calif -- SACRAMENTO, Calif. - Many same-sex couples are getting a tax break this year from the IRS, according to new requirements to report their combined income on federal tax returns.

Under "income splitting," the IRS is requiring all same-sex married couples or registered domestic partners in Washington state, California and Nevada to divide their combined income equally and report it on their separate tax returns.

For some couples, it will mean more money in their 2010 refund; for others, they'll pay more in taxes.

Either way, the change is significant, both monetarily and emotionally, officials of Lambda Legal, the national gay and lesbian legal rights group, said Tuesday in a conference call with reporters.

More...

http://www.sacbee.com/2011/02/23/3424934/new-irs-rule-might-mean-tax-break.html

[Bluenorthwest]

1. How nice for those in three out of 50 States

While the rest of us continue to get screwed by the religious cults of America and their devious dogmas. Both used to it and sick to death of it.

[Creideiki]

2. Doesn't look like the fixed the imputed income penalty

So if one person covers their same-sex spouse through insurance, the benefit of the insurance counts as income.

[Anywho6]

3. Yes

Since my partner and I registered as domestic partners in CA, I have had the benefit of being covered on her insurance at work. Even though it's still a huge savings (we pay in $94 a month for me), the cost of the remaining premium which is paid by the company, is considered income for my partner and she has to pay Federal tax on it. It's completely nuts.

I posted this article because the new income splitting rule came as a complete surprise to me. This was the first time I had heard of it and there's very little published about it. I don't anticipate that it's going to make any difference for my partner and I as we make close to the same amount.

[Pab Sungenis]

4. Not a help at all.

Our household is mainly a single income one. We actually fit the stereotype of one breadwinner and one stay-at-home spouse.

In New Jersey (not one of the states included in this half-hearted apology it seems) we have to do SIX tax returns instead of two because of the way our state's tax laws are written regarding married couples. As a result, we see what our taxes look like under hypothetical scenarios.

If not for DOMA, and the Feds would recognize our back-of-the-bus-pseudo-marriage "civil union" as valid, we would get more than $1,000.00 more in tax refund than we do under the current law.

Under this proposal, I would owe more in taxes than my partner's refund would be, meaning we would pay through the nose.

This is not a help. Maybe "allowing" instead of "requiring" would be a step, but until and unless DOMA falls and we can file as married I think they're better off leaving well enough alone.