Virginia Department of Taxation Issues Guidance on Same-Sex Couple Returns
Fairfax, VA (Law Firm Newswire) January 30, 2014 – Legally married same-sex couples must file separate tax returns in Virginia.
Virginia may be for lovers but, according to a recent decision by the Virginia Department of Taxation, “lovers” may not include same-sex, married couples — especially those attempting to file a joint tax return. The state’s non-recognition of same-sex marriage for the commonwealth’s tax purposes will remain in force, even though LGBT couples are now permitted to file joint federal tax returns.
The Department of Taxation decision, which was announced on November 8, 2013, confers separate, parallel fiscal statuses for same-sex couples who married in states where same-sex marriage is legal but who now reside in Virginia (where same-sex marriage is not legal).
“Same-sex couples who married in New York, Massachusetts or other states where same-sex marriage is legal, but who have established residence in Virginia, need to be aware of this distinction in the commonwealth,” said Lisa McDevitt, a prominent Vienna and Fairfax estate planning and family law attorney. “They also need to be aware that they can still avail themselves of a joint return for federal filing purposes.”
The Department of Taxation announcement was necessary in the wake of the landmark case United States v. Windsor, 570 U.S. 2675 (2013). In Windsor, the Supreme Court ruled that the third section of the Defense of Marriage Act (DOMA) was unconstitutional under the Due Process Clause of the Fifth Amendment.
The high court handed down its ruling in Windsor after a widow sought to claim the federal estate tax exemption for surviving spouses. The couple were legally married in Ontario, Canada, and then moved to New York, where one of them died. She left her entire estate to her surviving spouse. At the time the lawsuit was filed, same-sex marriage was not yet legal in New York state.
In practical terms, whenever a LGBT couple files a federal joint return, each person will have to recalculate their individual federal income tax liability — either as single or as head of household — when determining Virginia income tax liability. The Virginia-specific rules will also have potential tax consequences for businesses in the commonwealth.
“Those businesses in Virginia that deduct payments of fringe benefits to their employees’ same-sex spouses and to their dependents on their federal tax forms will have to adjust these deductions on their Virginia tax forms,” McDevitt said.
Lisa Lane McDevitt
2155 Bonaventure Drive
Vienna, VA 22181
Toll Free: 866-602-7850
- Watching for deception: Bitcoin may be used to conceal assets in divorce
Increasingly, divorcing spouses who wish to conceal their assets are turning to electronic currencies like Bitcoin. Bitcoin is the most popular of a host of computer-generated currencies that are used to buy all manner of goods and services. It rivals cash in terms of its anonymity and surpasses it in its ease of transfer and [...]
- Extra estate planning support may be necessary for those with dementia
Disabilities that sometimes develop with age can inhibit long-term planning skills. If you deal with such a condition, you may need to adjust your plans for the future so that they can support you and adhere to your wishes under any circumstance. The best advice is simply to start early. If Alzheimer’s or another form [...]
- When estate planning involves minor children, a testamentary trust may be the best option
One of the advantages of a living trust is that the assets held within it are not subject to probate, which can be a complicated, drawn-out and costly process. As such, many people automatically choose living trusts as they plan their estates. But there is another type of trust: a testamentary trust. While probate is [...]
- Good estate planning depends on good communication with loved ones
Because estate planning involves preparation for the disposition of assets after death, people often feel uncomfortable discussing it. It can be especially challenging for people to face planning with their children. But serious challenges can arise from a lack of communication between estate grantors and their children (their most likely beneficiaries and executors) before death [...]
- When Mediation Is Not the Best Way to Resolve a Divorce
Divorce proceedings can be expensive as well as time-consuming and emotionally draining on the main parties involved. An array of issues, including the division of property, child custody, alimony and other items of contention can prove to be the catalyst for a contentious, drawn-out affair in court. Mediation is often suggested as a viable alternative [...]
- Where There Is a Valid Will There Is a Proper Way to File in Probate Court
The term probate may evoke foreboding thoughts among many who hear it, but essentially the word means the act of validating and recording the will of a deceased person with the court that has jurisdiction. In the case of the commonwealth of Virginia, that court is the Circuit Court, and it is the proper filing [...]