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Frequently Asked Questions for Individuals
in a Same-Sex Marriage

See also Revenue Ruling 22-13-1 (2013)



Can a validly married same-sex couple who files a married, filing jointly federal return, also file jointly in Nebraska?

No. A same-sex marriage is not recognized under the Nebraska Constitution. Individuals in a valid same-sex marriage for IRS purposes must file their Nebraska individual income tax returns separately using the single or, if qualified, head of household filing status. Only one individual per household may use the head of household filing status.

How does an individual in a same-sex marriage file his or her Nebraska income tax  return?
  • Each individual must complete a pro forma federal return (a “mocked up” return that is not actually filed with the IRS) using the single, or if qualified, head of household filing status.
     
  • Each individual must use the numbers from the pro forma federal return to file a separate Nebraska Individual Income Tax Return, Form 1040N, using the single, or if qualified, head of household filing status.
     
  • Each individual must use the tax rates, credits, deductions, and adjustments corresponding to the single or head of household filing status, whichever applies.
For federal purposes, an individual in a same-sex marriage can add his or her same-sex spouse to employer-provided health insurance plans without having to impute taxable income (include the value of the employer-provided health insurance plan in taxable income). Does this apply for Nebraska?

No. Because Nebraska does not recognize a same-sex marriage, employers may not exclude the value of an employer-provided health insurance plan for a same-sex spouse from an employee’s income.

If a same-sex spouse is added to an employer-provided health insurance plan, the employer is required to report imputed income for Nebraska on the employee’s Wage and Tax Statement, Form W-2. How is the amount of imputed income determined?

The amount of imputed income is equal to the fair market value of the employer-provided health insurance benefit as determined by the employer and the insurance provider. This is the amount of Nebraska taxable income that the employer must include in box 16, State wages, tips, etc. and box 18, Local wages, tips, etc.  on the Form W-2, and is included in the amount subject to Nebraska income tax withholding.

When filing their Nebraska income tax returns, is a same-sex married couple limited to 10% of the Earned Income Credit (EIC) claimed on their married, filing jointly federal return?

No. Each individual in a same-sex marriage must complete a pro forma federal return using the single, or if qualified, head of household filing status. The Nebraska EIC for each individual is 10% of the EIC computed on the federal pro forma return, even if this amount is more or less than 10% of the amount of EIC computed on the federal married, filing jointly return.

When filing their Nebraska income tax returns, is a same-sex married couple limited to a percentage of the child/dependent care credit claimed on their married, filing jointly federal return?

No. Each individual in a same-sex marriage must complete a pro forma federal return using the single, or if qualified, head of household filing status. The Nebraska child/dependent care credit for each individual is a percentage of the child/dependent care credit computed on the federal pro forma return.  A copy of the pro forma Child and Dependent Care Expenses, Federal Form 2441, completed with the pro forma federal return must be filed with the Nebraska income tax return to document the child/dependent care credit claimed.

Is a copy of the pro forma federal return required to be filed with the Nebraska Form 1040N?

Generally, no. However, in some instances, a copy of the federal return is required. For example, taxpayers claiming the Nebraska EIC, or who enter federal tax liability on line  27 of the 2013 Form 1040N, must file a copy of the pro forma federal return with the Nebraska income tax return. Instances where a copy of the federal return is required are noted in the Form 1040N instructions. Keep a copy of the pro forma federal return and all related documentation for your records.

Individuals in same-sex marriages are required to file federal income tax returns using a married filing status, but must file Nebraska income taxes using the single, or if qualified, head of household status. How can an individual avoid having too little Nebraska income tax withheld?

Generally, income tax withholding allowances are the same as the number of withholding allowances the employee claims on his or her Federal Form W-4. When an employee wants additional state income tax to be withheld, he or she should complete and submit a written statement to the employer requesting the additional amount to be withheld.

If an individual in a same-sex marriage works in Nebraska (work state), but lives in another state that recognizes same-sex marriages (residence state), which state’s rules apply in determining whether income must be imputed for employer-provided health insurance?

The work state rules apply. Because the employer is located in Nebraska, the employer is required to report imputed income for Nebraska on the employee’s Wage and Tax Statement, Form W-2.


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