Tax Problem for Illinois Civil Unions

SPRINGFIELD, Ill. (IRN/KMOX) – We’re one month into civil unions in Illinois, and a problem has been discovered.

Couples in civil unions are supposed to be treated like married couples under Illinois law, but when it comes to income tax, there’s a snarl:

Illinois’ tax law says if taxpayers file their federal income taxes separately, they have to file their state taxes that way. Since civil unions aren’t recognized under federal law, civil-unioned couples in Illinois must file separate state tax returns. (Illinois Income Tax Act Sec. 502(c)(1)(C): “If the federal income tax liability of either spouse is determined on a separate federal income tax return, they shall file separate returns under this Act.”)

Since health insurance benefits that one civil union partner gets for another are taxed as income under federal law, and since the state uses the same numbers, they’re taxed under state law when it appears they should not be.

“Because Illinois uses the federal gross income numbers as the basis for Illinois taxation, those benefits are still going to be taxed under state law as well, and in my view, that is not in the spirit of the civil union law,” said Christopher Clark, senior staff attorney for the group Lambda Legal.

Clark says Lambda Legal is urging the Illinois Department of Revenue to rectify the situation, and is evaluating its options for redress.

Revenue Department spokesman Susan Hofer says legislation will be required. “It’s not a question of wanting to meet the full faith of the Civil Union Act. It’s that nobody amended the Illinois Income Tax Act,” she said.

Hofer says that with respect to the health insurance problem, the department would need a law that requires employers to provide a statement to employees who request it that breaks out cash compensation vs. the imputed value of federally taxable health insurance benefits.

Copyright IRN/KMOX

  • Tax Problem for Illinois Civil Unions | Tax Law Blog | IRS Tax Attorneys

    […] Source […]

  • Tax Problem for Illinois Civil Unions | Houston Tax Attorney

    […] Source […]

  • Tax Problem for Illinois Civil Unions | Dallas Tax Lawyers

    […] Source […]

  • Tax Problem for Illinois Civil Unions | Seattle Tax Lawyers

    […] Source This entry was posted in Seattle Tax Lawyers and tagged Find Tax Lawyers, Illinois Tax, Seattle Tax Attorney, Seattle Tax Lawyer, Tax Attorney, Tax Attorneys, Tax Law, Tax Lawyer, Tax Lawyers. Bookmark the permalink. ← Tax relief tip: Remember the 14-day rule when renting out your home Democrat Jay Rockefeller Proposes a Slew of Tax Increases → […]

  • Tax Problem for Illinois Civil Unions · Internet Tax Lawyers

    […] Source […]

  • Johnny Smith

    DON’ DELETE THIS! Your site has a lot of great stuff. I hate to even mention IRS, but if you have tax problems there are only two guys that even count? Check them out. They will take care of you and your readers!

blog comments powered by Disqus
Listen Now
Thanksgiving Guide
Make Your Picks!

Listen Live