Earlier this year, the IRS issued a ruling allowing all married same-sex couples to file a joint federal income tax return, regardless of the laws of the state in which the couple resides. The Arizona Constitution defines marriage as the union of one man and one woman. A same sex couple who was married in another state or country but who resides in Arizona is therefore required to file separate Arizona income tax returns as single or, if qualified, head of household.
This creates a complication because the income reported on the federal return is the starting point for calculating Arizona income tax. Under the new IRS policy, one income amount will now be attributable to two separate taxpayers. To address this complication, the Department of Revenue created a new form (Arizona Schedule S) that enables the same-sex couple to identify which individual earned which portion of the income reported on the joint federal return. Those amounts will become the starting point for completing the two separate Arizona tax returns.