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I am in a same-sex marriage and the following statements sum up my situation:

  • I personally moved to Illinois in May, my husband has lived in Illinois the entire year
  • My husband has worked exclusively in Illinois, I have worked exclusively in Indiana
  • Illinois recognizes our marriage for tax purposes, Indiana and the federal government do not
  • Illinois and Indiana do not have a reciprocity agreement

Now, my understanding is that I have to fill out a fake federal return saying I am married for the purposes of Illinois, and then an actual filing as single return to be sent in. I will also have to fill out a single Indiana part-year/non-resident return and can claim taxes paid to Indiana on my Illinois return, which because my husband was a full year resident and we will file as married, we will have to fill out a normal Illinois return.

Since we live in Illinois, all income will be reported to Illinois, but only my income will be reported to Indiana, correct?

So it seems to me that I need to fill out 3 1040-A (two single, one married), 1 Illinois (married), and 1 Indiana (single) and the married federal return will not be submitted. Is all of that accurate?

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    Many nonresident (joint) income tax returns works as follows: (i) report to us all your income $X (often just the AGI on the Federal 1040 form) as well as what part (say $Y) of that is attributable to this state. (ii) Compute the state tax on $X as per our state rules. Suppose this works out to be $Z. (iii) You owe us $Z times (Y/X). However, with possibly different marital status for Federal, Illinois, and Indiana purposes, the rules might be quite different.
    – Dilip Sarwate
    Commented Jan 16, 2013 at 1:57
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    Great question. I'm sorry to hear that this relatively simple situation is so massively complicated.
    – ChrisInEdmonton
    Commented Jan 16, 2013 at 14:56

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I suggest you get a tax preparer who specializes in RDP/SS couples in your state. To me what you described looks accurate, but I'm in no way a professional.

Also, I suggest getting an extension until October. DOMA is going to be decided upon by the SCOTUS this summer, and by October it is likely (at least so I hope) that you'll be able to file the Federal tax return as married. That would simplify significantly your situation, as with DOMA overturned IN will be forced to recognize your marriage as well.

An update as of June 26th, 2013: The SCOTUS did in fact declare the DOMA Section 3 as unconstitutional, thus the Federal government now must follow the law of the State of your residence. However, Section 2 of DOMA, the one that allows States to ignore other States' marriage laws, was left in tact since it was not directly challenged in the litigation.

I'm sure that when it is challenged, it will be declared unconstitutional as well, but until then you may still have problems when filing tax returns in States that ban same-sex marriage and do not recognize these marriages made elsewhere. If you become a resident of such a state, you'll have problems with the Federal filings as well, as the Feds follow the law of the State of residence.

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    For common sense' sake, let's hope for tax purposes, the Fed agrees these folk are married, and tells the states for tax purposes they must follow. What the OP is going through is a ridiculous set of hoop-jumping, as if our tax code isn't complex enough.
    – JTP - Apologise to Monica ♦
    Commented Jan 16, 2013 at 1:13
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    I hope the Fed agrees that these folk are married for all purposes. You think this is hoop-jumping? Wait till you hear about same-sex couples where one spouse is a foreigner.
    – littleadv
    Commented Jan 16, 2013 at 1:15
  • I'm no constitutional scholar, but my understanding was that states' right was the issue. FWIW, I support your suggestion.
    – JTP - Apologise to Monica ♦
    Commented Jan 16, 2013 at 1:18
  • couldn't he just purposely file incorrectly, and when the sanctions come in he can claim it violates the equal protection clause? I assume challenging it would be a funding issue though
    – CQM
    Commented Jan 16, 2013 at 1:20
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    @joe that's the reason why DOMA is unconstitutional - states decide who's married, and per the Constitution Feds must follow. But the tax hoop-jumping is just one (and relatively easier) problem that DOMA creates for these couples. Another problem is the immigration (Feds deal with immigration), and other states (DOMA allows them to ignore other states' laws, which is again against the Constitution). In this case IN is ignoring IL law unconstitutionally, and IRS is ignoring IL law unconstitutionally - but each violates a different clause.
    – littleadv
    Commented Jan 16, 2013 at 1:20

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