In a Same-Sex Marriage? Watch Your Federal Tax Withholding

Here’s something I encountered more than a few times the last two tax seasons: people in same-sex marriages in Iowa who haven’t had enough federal taxes withheld from their paychecks, so they owe (sometimes $1,000+) when they file their tax return.

What’s going on? Some employers are withholding based on the “married” withholding tables rather than the “single” tables.


Angie is in a same-sex marriage. She earns $60,000/year, payable twice a month (so $2,500/pay period). She claims 0 withholding exemptions. 

Since the federal government doesn’t recognize her marriage, Angie must file her federal taxes as a single person, so her employer should withhold at the single person tax rates. Using the single person rates, her employer should withhold $432.40 from her wages each pay period ($10,378 over the course of a full year).

Instead, Angie’s employer withholds taxes at the married person rates. This results in withholding of $285.90 from her wages each pay period ($6,862 over the course of a full year).

As you can see, the difference between withholding at the single rates or the married rates can result in a huge difference in how much tax is withheld.

In Angie’s case, if all she has is $60,000 of income, the standard deduction ($5,950) and her personal exemption ($3,800), her taxable income will be $50,250, and her tax owed would be $$8,599.

If her employer properly withholds at the single rate, she’ll get a refund of $1,779 ($10,378 – $8,599). If her employer incorrectly withholds at the married rate, she would owe $1,737 ($6,862 – $8,599).


One point I want to make is, Angie is not really “paying more” in taxes if her employer withholds at the married rates instead of the single rates. Her tax liability is $8,599. That’s the amount she’ll truly pay in taxes during the year.

The point on the withholding issue is, will she have to pay in when she files her tax return or will she get a refund? But in the end, her tax liability is $8,599 regardless of how much her employer withholds during the year.

Soon a Moot Point?

Of course, this could all become a moot point in late June or early July, if the U.S. Supreme Court overturns DOMA. But for now, it’s something for people in same-sex marriages to watch.