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Same-Sex Married Tax Filers After Windsor and Obergefell

Abstract

This article provides new estimates of the number and characteristics of same-sex married couples after U.S. Supreme Court rulings in 2013 and 2015 established rights to same-sex marriage. The U.S. Department of the Treasury and the Internal Revenue Service subsequently ruled that same-sex spouses would be treated as married for federal tax purposes. Because almost all married taxpayers file joint tax returns, administrative tax records provide new information on the demographic characteristics of married same-sex couples. This study provides estimates of the population of same-sex tax filers drawn from returns filed in 2013, 2014, and 2015, using methods developed by the U.S. Census Bureau to address measurement error in gender classification. We estimate that approximately 0.48 % of all joint filers in 2015 were same-sex couples, or approximately 250,450 couples.

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Notes

  1. The U.S. Census Bureau (2016) estimated that there were 56.1 million married-couple households in 2014. Because some married couples are not householders, the total number of census-estimated couples is slightly larger. We focus on married householders because census estimates of same-sex married couples are at the household level.

  2. Linking spouses that filed separate returns imposed data challenges because of a large number of erroneous or missing identifiers for the other spouse. We do not examine married-filing-separately returns here. Few couples file separate returns. In addition, we do not believe same-sex couples file separate returns at differential rates. For instance, in our analysis of geographic distribution of same-sex filers, we find no relationship between the share of same-sex joint filers and the share of married filers filing separately; areas with a high density of same-sex married couples do not appear to have high rates of married-filing-separate returns.

  3. Tax filers are not asked for their gender directly on their tax return. This information is recorded in the SSA Numident file, which records an applicant’s gender, place of birth, date of birth, and other information at birth or at immigration (for natural-born citizens, naturalized citizens, and permanent residents), or upon application for individual taxpayer identification numbers (for individuals without a Social Security number). We link the SSA-recorded gender to tax returns data using the Social Security number or individual taxpayer ID number.

  4. The data were extracted in late 2015 for tax years 2013 and 2014 and in late 2016 for tax year 2015. We exclude returns filed for earlier tax years (e.g., returns filed in 2013 for tax years prior to 2013), taxpayers whose addresses indicate that they live abroad (including in a U.S. territory or on a military base outside the United States), and a very small number of returns with missing or erroneous geographic information. Although almost all returns from 2013 have been processed, a small percentage from 2014 and 2015 (approximately 1 %) had yet to be processed. Hence, a small number of returns for those years are excluded.

  5. We use the filing order because it is informative about gender: in different-sex joint filers, the primary taxpayer is male in approximately 93 % of cases. Errors in classification that result in misidentification of same-sex filers therefore disproportionately take on a specific form (primary taxpayer misclassified “F” instead of “M,” or secondary filer misclassified as “M” instead of “F”), which can be used to improve the accuracy of the correction.

  6. For instance, relative to the primary estimates presented here, three of the indices produce population estimates that are 4 %, 6 %, and 7 % larger, and one produces an estimate that is 10 % lower.

  7. In addition, for 0.1 % of couples, the SSA has no record of gender for one of the taxpayers.

  8. In Online Resource 1, we present a table produced with several alternative values of the threshold. The estimates appear not to be very sensitive to the exact value, which is reassuring.

  9. Qualitatively, the name index appears to identify misclassified couples well, in the sense that a large fraction of reported MM couples include apparently misclassified secondary taxpayers (and vice versa for FF couples). Simulations in generated data suggest that this method provides an accurate correction for misclassification under the assumption that misclassification in the SSA data and using the name index is independent.

  10. In addition, it is plausible that some formally married same-sex spouses chose not to file joint returns because of legal, administrative, or other economic barriers that made it difficult for same-sex couples to file in the first years after Windsor. In those years, considerable uncertainty existed regarding the legal status, filing requirements, and other tax-related issues. In addition, a number of states that did not recognize same-sex marriage imposed barriers to joint filing, such as requiring that same-sex couples file as single for state purposes. In certain states prior to the 2015 ruling, same-sex couples were required to file separate state returns or to provide duplicative pro forma single federal returns to state authorities, which imposed substantial additional compliance burdens.

  11. According to Bishop-Henchman and Stephens (2014), for tax year 2013, 22 states did not recognize same-sex marriage while requiring taxpayers to reference their federal return when filing state income tax. In 18 of those states, same-sex filers were required to complete pro forma single federal tax returns or to apportion income according to single state returns, or were advised to file federal returns as single. The 12 states requiring the additional burden of pro forma single returns were Georgia, Idaho, Indiana, Kentucky, Louisiana, Michigan, Nebraska, North Carolina, Oklahoma, South Carolina, Virginia, and West Virginia. Alabama, Arizona, Kansas, North Dakota, Ohio, and Wisconsin required apportionment. Montana’s rules were unclear.

  12. These data are summarized in Table S1 in Online Resource 1, which provides a comparison between vital records, estimates of same-sex joint filers, and census same-sex spouses.

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Acknowledgments

We thank Gary Gates, Rose Kreider, Zach Liscow, Gui Woolston, and anonymous referees for their helpful suggestions. All opinions and any errors are our own.

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Correspondence to Adam Looney.

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Fisher, R., Gee, G. & Looney, A. Same-Sex Married Tax Filers After Windsor and Obergefell. Demography 55, 1423–1446 (2018). https://doi.org/10.1007/s13524-018-0684-5

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Keywords

  • Tax law
  • Same-sex marriage