The IRS released notice 2013-61 in late September that details special tax adjustment procedures for couples in same-sex marriages. Employment tax overpayment and gift tax overpayment corrections are a few reimbursements that qualifying couples may seek.
Employee Reimbursements for Same-Sex Couples
How can couples receive reimbursement for taxes withheld from their employer? Their employer. The caveat lies in when employers repay their employees. If an individual in a same-sex marriage does not receive reimbursement from their employer before December 31, 2013, the employee will receive credit for income taxes withheld in 2013 when they file their individual tax returns in 2014.
The statute of limitations for the new tax guidelines falls back to 2010, which means tax reimbursements can be collected on returns filed in 2010, 2011, and 2012—with interest. The IRS presented procedures for employers that regulate how prior returns may be corrected. The procedures include a written consent from the employees requesting reimbursement, in addition to several forms that must be filed under special deadlines. Employers and employees in North Carolina who are navigating reimbursement of overpaid Federal Insurance Contributions Act (FICA) taxes and Federal income tax should review procedures with a tax attorney.
Tax Advantages for Married Same-Sex Couples in NC
A North Carolina tax attorney can also explain additional tax advantages that married same-sex couples are now legally entitled to under federal law. Income tax returns for the last three years can be amended to take advantage of income tax savings, which is likely when one spouse has substantially higher income than the other.
Another advantage is the unlimited marital deduction, which means a partner can now give property to a spouse during life or upon death that is exempt from federal gift or estate taxes. There is also portability, which combines a deceased spouse’s unused federal estate and gift tax exemption with the surviving spouse’s exemption. These new changes should prompt all married same-sex couples to not only review their finances, but to revisit their estate plans.