In some states, property and income acquired during marriage becomes community property and vests equally in each spouse. Because community property statutes vary from state to state, their effect on federal and state taxes consequently also vary.
Additionally, same-sex couples living in community property states experience increased complexity here because community property depends on the existence of marriage, which most states do not recognize for same-sex couples. In fact, only four community property states- California, Nevada, New Mexico, and Washington- apply the rule to same-sex couples. Registered domestic partners (RDPs) in California, Nevada, and Washington must also follow their state’s community property laws.
To better prepare your taxes and learn more about community property, below are FAQs and resources, including forms, for your review.
To contact your senator in one of the four community property states, click here.
Frequently Asked Questions
My partner and I are RDPs not married and living in California. Which federal filing status should we use?
In California, you should file jointly. For federal tax returns, you should split your community property income on two individual returns.
My partner and I are not married nor RDPs and we live in California. Can I claim her as my dependent?
Under limited circumstances, a partner can be a dependent. She or he must earn less than the personal exemption amount ($3,950 for 2014) per year and the taxpayer must provide more than half of the dependent’s total support.
My partner and I were legally married in Washington and we don’t own any real property. Is there a commercial tax preparation software that can properly calculate our state and federal income tax?
If you have simple returns, it is possible that TurboTax will work. For anything more complicated, however, the commercial software is not adequate at this time.
For more Community Property FAQs, please click here.
(Note: The information in these FAQs was drafted for the benefit of RDPs and same-sex spouses in community property states prior to the Windsor decision. Now that the IRS recognizes same-sex marriages, spouses must file either jointly or married filing separately (MFS). Only when filing as married filing separately would spouses need to split their community income as described in these FAQs. Rarely is it beneficial to file as MFS, but you should contact a tax professional for more details.)
- IRS Information for Taxpayers Living in Community Property States
- California Income Tax Treatment of Same Sex Married Couples and Registered Domestic Partners
- Form 8958- Allocation of Tax Amounts Between Married Same-Sex Spouses or Registered Domestic Partners (RDPs) in Community Property States
According to Circular 230 any federal tax advice contained in this communication or anywhere on this website, is not intended or written to be used and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.