Same-Sex Married Couples and Step-Children

If both couples in a same-sex marriage are the legal parents of their children, then the parents can decide between themselves who claims which children as dependents on their federal tax returns. Normally, we think of the term “legal parent” to mean parent by blood or by adoption. But for tax purposes, step-parents also qualify. How does that work with same-sex couples?

Here is what the IRS says in a FAQ posted on the IRS website:

Q-7: Is a registered domestic partner the stepparent of his or her partner’s child? 

A-7: If a registered domestic partner is the stepparent of his or her partner’s child under the laws of the state in which the partners reside, then the registered domestic partner is the stepparent of the child for federal income tax purposes.

Note that the FAQ uses the term “registered domestic partner” because the FAQ is dealing with community property laws in California, Nevada and Washington state. But it appears that the IRS’s logic would apply to same-sex married couples in states like Iowa. If a spouse is considered a step-parent under state law, then that spouse would be eligible to claim a dependency exemption for the step-child.

What is a Step-Parent?

According to this ruling (unrelated to same-sex marriage) from the Iowa Department of Revenue, the term “stepchild” is not defined in Iowa law. Instead, the Department relied on the dictionary definition of the word for purposes of the ruling.

Webster’s currently defines step-child as:  “a child of one’s wife or husband by a former partner.”

Using that definition, a person in a same-sex marriage would be considered  a step-parent to their spouse’s children in many cases.

There are still gray areas though, such as: what if the “original” parent adopted or had in vitro fertilization without being married or without having a “former partner” before entering into a same-sex marriage? Would the “new” spouse be considered a step-parent in this case? I don’t have a good answer for that.

(Hat-tip to Professor Pat Cain at the Same Sex Tax Blog.)

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