For the first time, TurboTax users may notice a new twist on the old tax forms. The new documents now discuss different types of relationships around the country. And while Pennsylvania isn’t impacted by the change – same-sex marriage and domestic partnerships are still illegal in the Commonwealth – the new addition to the forms is certainly significant for same-sex couples in nearby states (like Maryland, New York and New Jersey).
In the past, TurboTax has been criticized for being a little slow in dealing with LGBT relationships. In fact, many users in same-sex couples took to social media last year, complaining that they received the following message when they tried to jointly file their taxes in states that recognize gay marriage and partnerships: “It looks like you have a form or tax situation in your federal return that TurboTax doesn’t support.” This included domestic partnerships, same-sex marriages and civil unions.
This season, however, TurboTax users will see this message:
Each state has different rules about which types of relationships are legally recognized in that state. If you are in a Registered Domestic Partnership, civil union, or same-sex marriage in a state that provided it, we’ll show you the options available in that state.
If you have moved to a state that does not legally recognize your relationship from your previous state, you may need to choose “single” on this screen.
Turbo Tax also breaks down the laws state by state, including registered domestic partnerships (California, Washington D.C., Nevada, Oregon, Vermont and Washington), civil unions (Connecticut, Illinois, New Hampshire, New Jersey and Vermont), and same-sex marriage (California, Connecticut, Washington D.C., Hawaii, Iowa, Massachusetts, Nevada, New York, Vermont and Washington).
This isn’t to say that same-sex couples filing federal taxes won’t still face problems. And that’s because of the Defense of Marriage Act (DOMA), which prohibits the federal government from recognizing same-sex relationships (even in states that legally recognize it). “The federal government and many state governments do not recognize registered domestic partnerships (RDPs), civil unions, or same-sex marriages and therefore give same-sex couples no other choice than to file single tax returns,” TurboTax explains on its website.
This means same-sex couples, when preparing their returns together, will be forced to prepare several different returns separately, as well. On the state level (in states that recognize these partnerships), couples can file together. But on the federal level (this is where DOMA comes in) more paperwork is required from the couple as a couple and as separate filers – this is much more than is required from heterosexual couples.
“When all is said and done, you and your partner will have created four returns; three federal returns (two single federal returns for the IRS and one mock federal return for your state) and one state return,” says TurboTax. “It’s a bit complicated.”
On a TurboTax user website, one expert even recommends that couples in same-sex relationships should also consider using desktop editions of the software rather than the online edition to avoid any additional complications.