Federal judge Michael McShane ruled on May 19th that Oregon’s prohibition on same-sex marriage was unconstitutional.
We devoted a lot of space last summer to the tax consequences of the unraveling of the Defense of Marriage Act, including its consequences for state income tax filings. In October of 2013 we reported that Oregon had administratively decided to respect any legal marriage, including same-sex marriages performed in other states. Because of that administrative action, this week’s news, while definitely news, may not be tax news. Same-sex couples previously married in Washington, California or elsewhere do not need to get married in Oregon in order to obtain the legal and tax benefits available to married couples under Oregon law, since the state recognizes their existing unions.
Being married does confer some tax benefits, notably estate and retirement tax benefits. For couples where one spouse has high income and the other spouse little or no income, there are significant income tax benefits as well. However, for couples with similar incomes, marriage can increase the overall income tax burden for the couple. Any couple seeking pre-nuptial tax planning is cordially invited to contact us.
This blog post is a summary and is not intended as tax or legal advice. You should consult with your tax advisor to obtain specific advice with respect to your fact pattern. Based on the most recent “best practice” standards for tax advisors issued by the Treasury Department, commonly referred to as Circular 230, we wish to advise you that this blog post has not been prepared to be used, and cannot be used, to provide assurance that penalties which may be assessed by the IRS or other taxing authority (including specifically section 6662 understatement penalties) will not be upheld.