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Tax and Estate Planning for Married LGBTQ+ Couples
Since the 2015 Obergefell v. Hodges Supreme Court decision, married LGBTQ+ couples have a streamlined framework for tax and estate planning. If you are filing a joint tax return or considering updates to your estate strategy, understanding the key considerations can help you make informed choices.
Filing Jointly as a Married Couple
Your marital status on the last day of the year determines your federal filing status. This means you can file jointly even if you married on January 1 or December 31. The same rule applies to couples undergoing divorce.
Many couples may benefit from filing jointly. For example, joint filers may qualify for the Child and Dependent Care Tax Credit, as well as education-related credits such as the Lifetime Learning Credit and the American Opportunity Tax Credit.
Gifting and Estate Planning Advantages
Before marriage equality, LGBTQ+ spouses could only use individual gift tax exclusions. Today, married LGBTQ+ couples can combine their allowances and gift up to $38,000 per recipient each year.
Portability of Estate Tax Exclusions
Each individual has a lifetime estate and gift tax exclusion ($15 million in 2025), which may be adjusted for inflation. The unused portion of a deceased spouse’s exclusion can transfer to the surviving spouse, increasing their lifetime exclusion. For instance, if one spouse uses $2.1 million of the $15 million exclusion, the remaining $12.9 million may transfer to the surviving spouse.
Unlimited Marital Deduction
The unlimited marital deduction allows spouses to transfer assets to each other at death without incurring federal estate taxes. This provision applies equally to married LGBTQ+ couples and provides flexibility in estate planning.
State Tax Considerations
Marriage equality simplifies state tax filing as well, but rules can vary by state. Consulting a qualified tax or financial professional is recommended to ensure compliance with both federal and state laws.
Overall, marriage equality has removed many previous barriers to tax and estate planning for LGBTQ+ couples. While federal rules provide broad guidance, professional advice is essential for personalized strategies.
