Domestic Partnership in California - Internal Revenue Service Ruling

Internal Revenue Service Ruling

In late May 2010, the Internal Revenue Service reversed a 2006 ruling, and declared that, with respect to community property, domestic partners in California must be treated the same as heterosexual couples due to a change to the California community property tax law in 2007. The IRS ruled the approximately 58,000 couples who are registered as domestic partners in California must combine their income for federal tax purposes, and then each report half of the total income and half of the total withholdings on their separate tax returns. If one of the partners makes significantly more than the other, the net result is a lower tax obligation for the couple. In December 2010, the Internal Revenue Service issued a revised edition of its Publication 555, Community Property, explicitly applying this ruling to registered domestic partners in Washington and Nevada, the other community property states with such registries, as well as, in California, both registered domestic partners and same-sex couples recognized by the state as married.

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