@NCCapitol

@NCCapitol

North Carolina same-sex couples could end up doing taxes twice

Posted October 23, 2013
Updated October 24, 2013

Anti-marriage amendment sign, gay marriage

— Some same-sex couples living in North Carolina will have to do their federal taxes twice, creating one return for the U.S. government and another "pro-forma" return for the state.

The double helping of paperwork comes thanks to a conflict between how the IRS and the state Department of Revenue treat same-sex couples.

Following a U.S. Supreme Court ruling this summer, the IRS issued rules saying that same-sex couples married in states that legally recognize such unions should file jointly as most other married couples do.

But North Carolina has a state law on the books and a recently passed state constitutional amendment that forbid the state from recognizing same-sex marriages, regardless of where they were solemnized.

Marriage Q&A: North Carolina's marriage amendment

"Consequently, individuals who enter into a same-sex marriage in another state cannot file a North Carolina income tax return using the filing status of married filing jointly or married filing separately," the Department of Revenue said in a directive issued to taxpayers last week.

For some couples, the conflict between federal and North Carolina law will mean filling out their federal returns twice.

"It doesn't affect all same-gender couples," said Justin R. Ervin III, a Greensboro lawyer whose practice focuses on estate and tax planning.

Those who never formally married, or didn't marry in a state that recognized same sex unions, will still file separate federal returns. Those whom it does affect, Ervin said, will file a joint return on the federal level – their "real" federal return. For the state, each will file a "pro forma" individual return.

The situation in North Carolina flips what had been the case for same-sex couples in states that recognized their marriages before the Supreme Court rulings prompted a change in federal policy, Ervin said. In those states, such as Massachusetts, those couples have had to file separate federal returns and then a pro-forma state return to file jointly. 

While same-sex couples will almost certainly spend more time filling out paperwork – or paying an accountant to do it for them – it's less clear whether they will pay more or less in taxes as a result of the changes.

"That's a highly individualized inquiry," Ervin said. "Whenever questions start to go into that realm, I send people to their accountants." 

In North Carolina, there could be consequences for employers as well.

"The employer of an employee in a same-sex marriage may have questions on how to calculate the proper amount to withhold from the employee's compensation for state income tax purposes and how to treat benefits coverage for the employee's spouse for state tax purposes," lawyer Deborah B. Andrews wrote for WRAL TechWire.

It's unclear how many North Carolina tax filers will be affected by the guidance on same-sex marriage, but the process for filing a pro-forma return is not new. 

"The pro-forma return process is an existing methodology that has been used by state income taxpayers in the past," said Department of Revenue spokesman Trevor Johnson.

It was created, he said, to deal with married couples who file joint federal returns but who may not both have income taxable in North Carolina. The state created that option, Johnson said, because "the State has no jurisdiction to require a person who is not a resident and does not have income from North Carolina sources to file a North Carolina return."

58 Comments

This story is closed for comments. Comments on WRAL.com news stories are accepted and moderated between the hours of 8 a.m. and 8 p.m. Monday through Friday.

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  • akdavis1 Oct 25, 7:30 p.m.

    I guess WRAL will not post my comments. If this door gets opened I'm just say'in would you not be discriminating against ANY other group that wanted to get married? Polygammy anyone? Remember we have to be fair to all. How can you allow one group and not another?

  • scubagirl2 Oct 25, 6:06 p.m.

    "I don't understand why people get so worked up about gay marriage. Do gay marriages affect any of us in any way?? I don't think my job in jeopardy because 2 dudes get married...I don't see the price of groceries going up, or my car being taken away from me or my kids having to go to different schools....it doesn't affect me in any way and it doesn't affect other people's lives in any way, so why are you so worked up about it?? Because you don't agree with it?? Because your God doesn't agree with it?? That's YOUR God, not mine, not theirs.

    Why do you get to dictate what the rest of the country does because of one sect of religion? I bet if a practicing Muslim were in office and declared that all women must cover every part of her body except her eyes, you'd be screaming about how unfair it was, and to keep your religion out of my life!! This is kinda the same thing!!AppSt1998"

    One of the BEST posts I've read about this..but trying to put logic into this is so completely lost on many

  • slcota Oct 25, 11:52 a.m.

    Interesting to see all these ignorant comments trying to link marriage to children, because there's no such legal requirement. Sterile people can marry; post-menopause women can marry; married couples can choose not to have children and some married couples cannot have children. jackjones2nc

    it isnt a valid arugment, but people are too ignorant to admit they are wrong.. my friend (for the second time) has just given birth (as a suragate) for a gay couple.. see.. SS couples have children too :)

  • slcota Oct 25, 11:48 a.m.

    Why do you get to dictate what the rest of the country does because of one sect of religion? I bet if a practicing Muslim were in office and declared that all women must cover every part of her body except her eyes, you'd be screaming about how unfair it was, and to keep your religion out of my life!! This is kinda the same thing!! AppSt1998

    !!! EXACTLY!!!

  • AppSt1998 Oct 25, 10:22 a.m.

    Also, I don't think people are understanding the article very well. NC isn't saying you can't file jointly on your federal return....they don't get to tell you what you can do on your federal return.

    If you remember, there are figures that you pull off your federal return and plug them into your state return. NC is saying you can't take those figures, from a joint return, a plug them into a state return. You have to create a separate return, and use those figures.

    That's how I am understanding it.

  • AppSt1998 Oct 25, 10:13 a.m.

    I don't understand why people get so worked up about gay marriage. Do gay marriages affect any of us in any way?? I don't think my job in jeopardy because 2 dudes get married...I don't see the price of groceries going up, or my car being taken away from me or my kids having to go to different schools....it doesn't affect me in any way and it doesn't affect other people's lives in any way, so why are you so worked up about it?? Because you don't agree with it?? Because your God doesn't agree with it?? That's YOUR God, not mine, not theirs.

    Why do you get to dictate what the rest of the country does because of one sect of religion? I bet if a practicing Muslim were in office and declared that all women must cover every part of her body except her eyes, you'd be screaming about how unfair it was, and to keep your religion out of my life!! This is kinda the same thing!!

  • davidk_at_unc Oct 24, 4:57 p.m.

    "You liberals lost. We won. Deal with it. As to predicting how the Supreme Court will rule, good luck on that one. Stop whining. Obey the law." -- gnewsome1

    You cannot possibly imagine how much we're going to enjoy reminding you of this once everything gets straightened out by the USSC. I'll be sure to save it!

  • wjcspanteach Oct 24, 2:12 p.m.

    http://www.supremecourt.gov/opinions/12pdf/12-307_6j37.pdf

    The actual decision if you want to take the time to read it. It is 77 pages long. Quite fascinating :D

  • wjcspanteach Oct 24, 1:35 p.m.

    I don't think it can be much more clear than that!

  • wjcspanteach Oct 24, 1:35 p.m.

    mikeyfan5600:
    I have read quite clearly what the law says. It says as follows: Section 3 of the Defense of Marriage Act, which federally defined marriage as a union between one man and one woman as husband and wife, is unconstitutional under the Fifth Amendment Due Process Clause's guarantee of equal protection. The FEDERAL Government of the United States is thereby obliged to RECOGNIZE same-sex marriages approved by states. The judgment of the Second Circuit is affirmed.

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