There are important distinctions that must be made when it comes to one’s options for legally ending a marriage. Connecticut residents may be used to thinking of the terms “divorce” and “annulment” as interchangeable, but the reality is that these concepts are actually quite different. Specifically, the IRS considers these actions to be totally separate from one another, and the taxes of both individuals will be influenced accordingly.
Generally speaking, a divorce is granted by a state court when a marriage was considered valid when the couple entered into the arrangement. Contrarily, an annulment is only granted in cases in which the court deems the marriage void, or at least voidable. This can occur in instances in which one or both members of the couple were not mentally sound to make the decision to enter the marriage, which can apply when one or both were intoxicated at the time of the union. Ultimately, voidable marriages generally violate the concept of informed consent, wherein one or both parties enter into the marriage under false pretenses due to coercion, force or a general inability to make such a decision in a legally binding way.
The IRS takes a special interest in this differentiation, particularly in cases of annulment. That is to say, if a marriage is retroactively annulled, it technically never happened; therefore, the couple was never entitled to file taxes jointly as a married couple. This can have far-reaching implications for both individuals. Even for couples who get divorced, the timing of the divorce, meaning before or after Dec. 31, can influence how they file their taxes for the year.
As with most divorce-related issues, knowledge is absolutely critical in navigating the end of a marriage effectively. Connecticut residents who are seeking a divorce could benefit from researching their options, rights and responsibilities ahead of filing. The more information both individuals have when approaching a divorce court, the more likely the process is to be relatively smooth.
Source: accountingweb.com, “Divorce Versus Annulment: It Makes a Big Difference on Your Tax Return”, Julian Block, Feb. 4, 2015