Many same-sex couples eligible for big tax refunds

September 27, 2013: 3:25 AM ET
same sex retroactive funding
Married same-sex couples can amend their tax returns and claim refunds for the past three years.
NEW YORK (CNNMoney)

Married same-sex couples who paid extra tax because the federal government didn't recognize their marriage are now eligible to get some of that money back.

The Defense of Marriage Act, or DOMA, defined marriage as between a man and a woman, which meant married same-sex couples had to file their taxes individually. But the Supreme Court's summer ruling overturned that law. Now these couples are not only able to file as married going forward, but they have the option of amending their tax returns for the past three years if it would benefit them.

For some couples, doing this will reduce their overall tax liability and result in big refunds, which is typically the case when there is a large disparity in incomes (for example, when one spouse doesn't work).They can also claim any tax paid on health insurance benefits extended from one spouse to another through an employer-sponsored plan.

Related: Same-sex marriage ruling - 'A huge relief'

Refunds will vary widely by couple, and could be as high as tens of thousands of dollars. Janet and Janet Emery-Black, from Nampa, Idaho, are anticipating retroactive refunds totaling $30,000. Another couple, Adele and Jennifer Hoppe-House, from Los Angeles, expect to get back $13,000.

The statute of limitations for amending a return is generally three years from the date your most recent taxes were filed. Couples who filed protective refund claims before the Supreme Court even issued its ruling may receive four years of refunds.

Same-sex couple: 'Freedom is priceless'

Spouses can also claim refunds if they paid federal estate tax when a partner passed away, says Janis McDonagh, a partner at accounting firm Marcum LLP. Under DOMA, same-sex couples were required to pay a 40% tax on assets exceeding $5 million -- a tax opposite-sex couples didn't face.

This issue was at the center of the Supreme Court case. The plaintiff, 83-year old Edith Windsor, argued it was unconstitutional that she had to pay estate tax when her wife passed away. Thanks to the Supreme Court's ruling, she is owed a refund of more than $600,000 in estate tax.

Related: Married same-sex couples gain equal tax benefits

Amending past returns is optional, so those who would owe more tax by filing jointly don't have to do anything. You can also choose which returns to amend depending on what benefits you most -- so you could opt to amend returns for 2010 but not 2011, for example. And only couples who are married can file jointly -- people in domestic partnerships or civil unions aren't eligible for retroactive refunds at this time.

Determining whether you're eligible for a refund will typically require redoing your taxes -- either yourself, with a tax preparer or with a site like Turbotax, said Michael McCarthy, a managing director at U.S. Trust.

Going forward, married same-sex couples must file all returns as married.