Same-Sex Marriage and Wrong Filing Statuses on the Iowa Return

Up until the Defense of Marriage Act was ruled unconstitutional in June, couples in same-sex marriages had to jump through hoops to get meet their federal tax obligations. They had to:

  • Prepare and file separate federal returns as single people
  • Prepare a “mock” federal return showing what their federal taxes would have looked like if the federal government had recognized their marriage
  • Use the mock return to prepare their “married” Iowa return]

Now that DOMA no longer exists, the process is much simpler: couples in same-sex marriages will simply file ALL their tax returns as a married couple (assuming they live in a state that recognizes their marriage).

But today I want to talk about an Iowa issue that has come up a few times in the years prior to DOMA being overturned. That issue is, couples in same-sex marriages NOT preparing a mock return and NOT filing their Iowa taxes as a married couple.

Iowa was very clear from the beginning that couples in same-sex marriages MUST file Iowa taxes as a married couple. But sometimes — in my experience, usually with self-prepared tax returns of people who used TurboTax or other DIY software — people would be working on their separate, “single person” federal return and go ahead and just file their Iowa return at the same time with the same filing status.

Oops. The person is married in Iowa but they filed as a single person (or head of household). What is the fix?

The proper thing to do is file amended Iowa tax returns as a married couple.

Now, Iowa taxes for married couples are kind of weird. Most married couples in Iowa file as married filing separately, which means there are allocations of itemized deductions to make. Iowa has just one tax bracket, regardless of filing status. So it’s hard to say what the dollar amount difference would be for someone filing as married vs. filing as single. Any attempt on my part to give an example with numbers would cause your eyes to glaze over.

But just know that the technical fix is to amend the Iowa return and file as a married couple.