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NCDOR Issues Income Tax Directive for Married Same-Sex Couples

Posted on: November 13th, 2014
same-sex couple tax planningLess than two weeks after a North Carolina judge ruled a ban on same-sex marriage was unconstitutional, the North Carolina Department of Revenue issued a directive recognizing same-sex marriages in North Carolina for income tax purposes.

In the past, married LGBT couples faced complicated tax filing procedures. (Our attorneys reviewed the tax steps same-sex couples needed to make.) Before the recent ruling, same-sex marriages were recognized for federal income tax purposes, but not on the state level. Now that the law has changed and the ban is lifted, the NCDOR directive provides:
 
Same-sex couples who are legally married under any state law by December 31, 2014 must generally file a North Carolina income tax return using the same filing status claimed on the federal income tax return. However, if one spouse is a nonresident individual and has no North Carolina taxable income for the tax year, the spouse that is a resident of North Carolina or has North Carolina taxable income may elect to file a return as married filing separately. Individuals in a domestic partnership, civil union, or long-term relationship, but not legally married, must claim the filing status of single or, if qualified, head of household or qualifying widow(er).

Married same-sex couples who were married in another jurisdiction before the 2014 tax year and who filed married for federal tax purposes and single for North Carolina tax purposes “may, but are not required to, amend their North Carolina income tax returns for any corresponding tax years within the statute of limitations.” Couples should review returns with a North Carolina tax attorney to learn if it is to their advantage to file amended returns.

For a full copy of the directive: Same-Sex Marriage and Filing Status in North Carolina.
 
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