I get overwhelmed by my taxes. The task of gathering paperwork, shuffling receipts, and calculating dozens of numbers will undo even the brightest mathematician. But this year North Carolina’s same-sex married couples face an even tougher challenge. Since the state refuses to recognize their marriages, same-sex couples will have to complete five separate tax returns in order to meet their legal obligation.
Let me say that again: Five. Separate. Tax. Returns.
In contrast, married heterosexual couples file only two tax returns: a federal and a state. Because the Defense of Marriage Act got overturned federally, same-sex couples find themselves subject to conflicting tax laws. In the eyes of the federal government, they are legally married and must file as such. According to North Carolina state law, they are unmarried, and must file separately.
Since North Carolina relies on federal tax forms to calculate tax liability, people in same-sex marriages will have to complete a separate set of “dummy” tax forms to pass through to the NC tax system. Although they will officially file their federal income taxes as married, the “dummy” forms will list each partner as unmarried since they are single in the eyes of the North Carolina Department of Revenue.
The only good news is that, for the first time ever, married same-sex couples can identify as “married filing jointly” on their federal returns. This can mean an immense tax savings, especially in couples where one partner makes significantly more than the other. How much savings? A couple where one spouse makes $100,000 a year while the other makes no income could save $4,000 in federal taxes each year.
Meanwhile, in North Carolina and other states where same sex marriage is still not recognized, these same-sex couples enjoy no such privileges. Even with a marriage license, joint property, a child, or any of the other trappings of lifelong partnership, couples cannot share tax write-offs on state returns. This means they have to choose which spouse gets to use deductions for charitable donations, child credits, and other tax situations.
These complications mean that many same sex couples will need tax professionals to help them sort out their filing situations. When you are facing five forms and trying to split deductions among two state returns, TurboTax just won’t cut it. North Carolina laws penalize a minority group and leave them holding the bill for backwards politics.
Some groups are pushing back against the state’s regressive tax policies towards legally married same-sex couples. In Mocksville, a couple who got married in New York filed their state taxes jointly, in defiance of laws invalidating their partnership.
“[We] are fortunate to live and work in a community surrounded by family and friends who acknowledge, support, and celebrate our relationship as a married couple,” said Mary Jamis, who filed her joint tax return with her wife, Starr Johnson. “But the reality is that, due to Amendment One, we continue to be denied many of the basic rights and privileges that are afforded to opposite-sex married couples.”
Jamis is part of a campaign called Refuse to Lie, which started in Florida. State groups such as Equality NC and the Campaign for Southern Equality are calling on the Governor and General Assembly to overturn Amendment One and establish marriage equality in North Carolina.