Just days before tax deadlines hit, many Illinois civil union couples are reporting confusion over filing taxes this year, according to 14th Dist. State Rep. Kelly Cassidy.
Cassidy hosted an information session on civil unions and taxes at Center on Halsted April 10, she said, because constituents had been asking her for answers on the new tax rules. When Cassidy herself struggled to answer them, she arranged the information session.
"If one person is calling about a problem, hundreds of people are having it," said Cassidy.
Approximately 20 people attended the session, and many seemed to leave more confused than when they came.
That is because in addition to filing jointly for the first time, civil union couples in Illinois cannot file electronically and must file two differing federal returns.
Cassidy said she worries that process is so new and confusing for civil union couples that most need professional advice to file this year.
"There are obvious wrinkles," said Cassidy. "There are going to be people who run afoul of this innocently."
Cassidy said she is "deeply concerned" that civil union couples do not know they must file as married this year.
That is a change from an earlier policy announced by the Department of Revenue (IDOR). Initially, IDOR said that civil union couples could not file jointly in Illinois because Illinois tax returns are based on federal returns. The Defense of Marriage Act prevents recognition of civil union spouses federally. As a consequence, IDOR said it would not allow civil union couples to file jointly.
LGBT advocates opposed that policy, and it was reversed. Now, civil union couples, which includes couples married out-of-state, must file as married and note their civil union statuses.
Because of DOMA, those couples will have to file both a single federal return with the IRS and a mock federal return that notes civil union status with the state. As a result, the couples cannot file electronically, a fact that surprised some who attended the information session.
"The burdens come with the benefits," said Brian Fliflet, deputy general counsel for IDOR.
Among the burdens is that spouses who receive partner benefits will have to have their employers calculate two different totals of their earnings: one for the state, which acknowledges the union, and one for the federal government, which will tax such benefits.
"That's an extra step you're going to have to take," said Fliflet. "You're going to have to go to your employer and ask them because they're not going to do it for you."
But specific questions get hairier for some who anticipated filing separately and did not plan for the bump in owed taxes or penalties as a result of having their civil unions acknowledged later in the game.
Attendees at the information session, expressed frustration with the process, which they said it has been unfair. Others wondered aloud how they would file by paper mail on short notice.
Asked if civil union spouses will be able to file electronically next year, Fliflet said "hopefully."
Sue Hofer, a spokesperson for IDOR, said that likely depends on fate of DOMA. IDOR has yet to figure out how to create a system that allows one to enter the mock federal return in addition to version sent to the IRS.
Cassidy, like others, said she just learned that civil union couples must file by paper mail, but she said the fault is not on the state.
The bottom line, she said, is the federal government has created a two-tiered system, one in which the state and federal calculations can never agree unless DOMA is overturned.
"It really speaks to the reason why we need to go all the way to marriage equality," she said.
Specifics on civil unions and tax filing are available at www.revenue.state.il.us/Individuals/Same-Sex-Civil-Unions.htm. The number for the IDOR hotline is 1-800-732-8866. The TDD (telecommunication device for the deaf) number is 1-800-544-5304.