Are there any tax implications to a civil union?
Yes, there are tax implications to a civil union in South Carolina. The Internal Revenue Service (IRS) does not recognize civil unions, and therefore couples in a civil union are not allowed to file joint federal tax returns. This means that each partner is responsible for filing their own taxes, which can be complicated and costly. In regard to state taxes, the South Carolina Department of Revenue does recognize civil unions for tax-filing and tax-related purposes. Civil partners can file joint state returns, if they choose, which could lead to potential savings, such as allowing the couple to file at lower tax rates or claim certain credits. That being said, it is important for couples in civil unions to talk to a tax professional to determine their individual best course of action. Also, it is important to note that couples in civil unions may be subject to certain state estate taxes that married couples are not. Generally, a civil union partner will be considered a “stranger” to the other partner, meaning the estate of one partner could be subject to more taxes than the estate of a married partner. Because of this, it is important for couples in civil unions to discuss their estate planning and make sure their wills are up to date. In conclusion, there are certain tax implications to a civil union in South Carolina that should be taken into consideration. Couples in civil unions should seek the guidance of a tax professional to determine their best course of action, as well as review their estate plans.
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