On October 24, 2014, the North Carolina Department of Revenue issued a new directive for NC individual income tax purposes related to the filing status of individuals who have entered into a same-sex marriage. For North Carolina income tax purposes, same-sex marriages will now be recognized.
For any same-sex couple who are legally married under ANY state law by December 31, 2014, they must generally file a North Carolina income tax return using the same filing status that they used when they file their federal income tax return. In the situation where one spouse in a same-sex marriage is a resident of North Carolina or has North Carolina taxable income, but the other spouse is a nonresident and has no North Carolina taxable income for the tax year, the spouse that is the North Carolina resident or has North Carolina taxable income, may elect to file their North Carolina individual income tax return as married filing separately.
Individuals who are not legally married, but may have a domestic partnership, civil union, or long-term relationship must claim a filing status of single, or if they qualify, head of household or qualifying widow(er).
So, the next logical question is, what do we do about tax years before 2014? If a same-sex couple was legally married in a tax year before 2014, but has not yet filed their tax returns for those tax years for North Carolina, they also must generally file a North Carolina tax return using the same filing status that they used on their federal tax return.
What if they have already filed their North Carolina income tax returns for years before 2014? For those same-sex couples, if they filed their federal tax return reflecting married filing jointly or married filing separately, and filed North Carolina tax returns prior to October 24, 2014 reflecting a filing status of single, or if qualified, head of household or widow(er), they may, but are not required to, amend their North Carolina income tax returns for any tax years for which the statute of limitations has not expired.
One further item as it relates to same-sex marriages is that those individuals will need to furnish a new Form NC-4 or NC-4 EZ—Employee’s Withholding Allowance Certificate to their employers that reflects their status as being a married individual. The Allowance Worksheet should be prepared just as it would be for a married individual.
