Michigan Offers Constructive Tax Filing Guidance for Same-Sex Couples

September 20, 2013

On August 29, the IRS announced that any same-sex couple who married in a state that recognizes same-sex marriage can file a joint federal tax return, even if the state where they currently live does not recognize same-sex marriage.

In a report issued that day, we explained the implications of this decision, particularly for taxpayers in 24 states that do not recognize same-sex marriage but do require taxpayers to reference their federal return in filling out their state income tax (the red AND striped states in the map at the bottom). Without further guidance, same-sex couple taxpayers in those states will fill out a joint federal tax return but two single state tax returns, and be stuck because the state single returns require information from a corresponding federal single return. We offered a number of options for states to resolve this, and urged states to resist any calls to decouple their tax system from the federal system, which would impose huge costs on all taxpayers.

Wisconsin was the first to issue revenue guidance for individuals in a same-sex marriage (that is, a same-sex marriage obtained in another state, since Wisconsin does not recognize same-sex marriage), instructing these taxpayers to file separate single Wisconsin returns and use a newly provided state schedule (Schedule S) to divide the income on the joint federal return between the two taxpayers for the state return. Taxpayers are also instructed to file returns on paper, and past years' returns cannot be amended.

Michigan has now issued similar guidance to its taxpayers:

Each individual who has income attributable to Michigan and who has filed a joint return with the IRS as a same-sex couple must separately report adjusted gross income (AGI) for Michigan income tax as a single filer. Each individual must recalculate their federal adjusted gross income as if they had filed a single federal return. The Department will provide a worksheet on its website that can be used to recalculate income. Filing as single individual may affect the filer's eligibility for Michigan tax credits.

It’s possible that some of these 24 states — Arizona, Colorado, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Utah, Virginia, and West Virginia (as well as Wisconsin and Michigan) — will recognize same-sex marriage between now and next spring’s tax filing season. But those states that do not should consider following Wisconsin and Michigan’s lead here.

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