Hi Heather!

I know you are not my lawyer or a tax expert, but here is my question.  My fiancee and I live in New York, which I believe is not a community property state.  I have significant student debt (around $175K) and she does not have any.  Right now I am on an IBR repayment plan, based on my income alone.  If we get married, I imagine my IBR will increase significantly.  When we file our state tax return, in order to complete one as a married couple, we must first file a “dummy” federal return. So technically,  I will have prepared, but not filed, a federal return. Right now, my IBR is based on my federal return (filing status single).

Technically, if DOMA is no longer being enforced, we should arguably be able to submit our federal return without issue (don’t worry, i’m not asking you if that’s legal or not!), but in so doing, we would also have to submit this federal return when I re-apply for my IBR later this year.  However, I could also just file a joint state return and a single federal return since the law is not totally clear that we can submit this federal return as a married couple.  Have you come across cases like this? Where same sex married couples have seen their IBR change because they are legally married at the state level? And is it true that the IBR is only based on a federal return, so technically we can still be married and file jointly at the state level, but each file a single federal return, therefore not affecting my IBR?  Any insight you can offer would be greatly appreciated!!

IBR is based on federal return only, yes that’s right.  The only reason a loan servicer will look at other documentation is they require Alternative Documentation of Income or you request that they look at Alt Doc of Income.  They only ask for it if you can’t cough up a federal tax return.  You only ask for it when you can show you make less now that what your federal return reflects.

So what you’ll need to think through is whether you gain more in tax savings by filing a joint federal return than you lose in student loan savings.  Assuming that you may file joint federal return, you’re in the same position as any married couple with student loans.  You’ll probably pay more in federal taxes by filing separately when you could have filed jointly, but you’ll need to decide if it’s worth it to save on your loans.

PS Good job falling in love with a woman who owes no student loans!