by Stephanie Berenbaum – updated March 27, 2013
Historic Supreme Court Case – With Major Financial Implications
A historic week is heating up at the Supreme Court. The Court is hearing arguments related to gay marriage in America – and the outcome will have major implications for civil rights and personal finances in our country. Today, specifically, the Supreme Court is examining the impact of the 1996 “Defense of Marriage Act” (aka DOMA).
According to CNN, “DOMA … defines marriage as between a man and woman and therefore means federal tax, Social Security, pension and bankruptcy benefits as well as family medical leave protections do not apply to legally married gay and lesbian couples.” In light of today’s topic, we wanted to re-run our piece from last year on the financial implications of DOMA…
Did You Know…
Though we’ve always been supporters of same-sex marriage, we realized we were pretty ignorant of the financial implications of being a gay couple – even if you are married in a state where gay marriage is legal. Here’s a brief look at some of the issues unfairly affecting homosexual couples ….and their finances!
DOMA is the “Defense of Marriage Act” – signed into federal law in 1996 by that noted defender of “traditional” marriage – Bill Clinton – believe it or not... DOMA states that for federal purposes, only heterosexual marriage is legally recognized. So, even if you live in a state where gay marriage is legal, financial complications arise for gay couples when it comes to benefits that fall under the jurisdiction of the federal government. And you thought YOUR taxes were complicated!
Let’s say, for example, you are a gay married couple living in New York State. Even though you can file your taxes jointly at the state level, you still need to file separately at the federal level. So, for your state return you are married, but for your federal return you’re NOT. Not only does this result in additional tax preparation fees for the couple, there are many federal tax benefits and deductions that heterosexual couples receive that are not available to homosexual couples. Check out this link from the Family Equality Council for more info!
I have to admit, I had no idea about the disparity in taxation of health benefits between heterosexual and homosexual couples. According to the Family Equality Council, “LGBT families with health benefits have higher taxable wages. If LGBT families receive family health benefits from an employer, they pay federal tax on the value of those benefits, even if the employer provides them at no cost. Married heterosexual families receive these same benefits tax-free.”| Print
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