* This is an interesting development…
Starting in January, Illinois will allow couples who obtained civil-union licenses this year to file joint state income tax returns, a symbolic change that likely won’t save couples money but that one gay-rights group called an important step.
Monday’s announcement comes after Illinois became the seventh state, along with the District of Columbia, to give same-sex couples significant legal protections. Gov. Pat Quinn signed the state’s civil union law in January.
That bill included the right to decide medical care for an ailing partner and the right to inherit property, but it didn’t include the ability for same-sex couples to file a joint tax return.
While federal law does not allow same-sex couples to submit taxes together, Quinn pushed for the state to make the change after signing the civil union bill, Illinois Department of Revenue spokeswoman Susan Hofer said Monday.
* Equality Illinois has been pushing for this ever since the civil unions law took effect. From a press release…
“Since the beginning of June when same-sex couples first started entering into civil unions, no one could speak with certainty about how this new status would affect state tax policy,” Randy Hannig, Director of Public Policy for Equality Illinois, said. “We immediately reached out to the Illinois Department of Revenue and started the process of figuring out a solid solution to this problem. Illinois law specifies that couples in a civil union are afforded the same rights and benefits as married spouses, so why should same-sex couples’ state tax status be any different?”
Under the new guidelines issued by the Department of Revenue, same-sex couples in a civil union may elect to file state taxes as “married, filed jointly” or “married, filed separately” – the same options opposite-sex married couples may choose. If applicable, couples would check a box for “same-sex civil union return.” In order to determine the adjusted gross income to include on state filings, couples will have to complete a pro forma federal IRS return.
* From Illinois Issues’ blog…
Those in civil unions would still have to file separate federal returns as single because the federal government does not recognize their partnerships. Couples who do not wish to file a joint return would still file as married but would be able to file separate state returns.
Hofer said joint filing for state taxes will not result in large tax benefits for couples — the substantial benefit comes at the federal level for couples with disparate incomes. If one person has a much smaller income, it can move the household into a lower tax bracket than the individual was in. “In Illinois because we are a flat tax state, you really aren’t going to see any significant change to your taxes. … With the state, everybody pays a 5 percent flat tax. But there will be some benefits.” She said that exemptions such as for property taxes or education expenses, could be applied a couple’s total income instead of just an individual’s earnings.