DOMA SUPREME COURT DECISION – Tax and Legal Implications

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Washington, D.C. – Yesterday, the U.S. Supreme Court overturned a key part of the Defense of Marriage Act, also known as DOMA.

The original purpose of DOMA was to federally define marriage as a union between a man and a woman. By overturning DOMA, legally married same-sex couples now have access to the same federal benefits as married heterosexual couples. The federal government will now have to recognize all state-sanctioned marriages, regardless of couples’ genders.

Marital status plays a big part in many federal laws. Some of the key federal benefits that will now be available to gay couples are:

  • Exemption from estate taxes
  • Social security for widows and widowers
  • Joint filing of income taxes
  • Immigration laws pertaining to spousal residency
  • Military family benefits
  • Health insurance and pension benefits for federal workers

In total, there are over 1100 federal benefits that have been available to heterosexual couples that will now be available to same-sex couples.

It is worth noting that the demise of DOMA doesn’t broaden the legality of gay marriage. It in no way forces states to legalize gay marriage if they haven’t already. There are currently 13 states plus the District of Columbia that have legalized gay marriage – go to http://www.freedomtomarry.org/states for state-to-state information.

It is especially important for same-sex married couples to review their tax situation and estate planning now. Tax laws are complicated, and careful planning will ensure that gay couples are taking the best advantage of their new benefits. Contact your Carpenter, Evert and Associates tax advisor for more information.

The Women Behind the Demise of DOMA

In 2010, Edith Windsor sued the U.S. Government because she had to pay over $363,000 in estate taxes after her same-sex spouse passed away.  She and her wife Thea Spyer were legally married in New York in 2007, but the federal  government did not recognize the marriage.  If they had been a straight couple, she would have owed nothing.  As a result of yesterday’s decision, Ms. Windsor is owed the entire amount, plus interest, that she paid in estate taxes. The couple had been together 44 years when Ms. Spyer died.

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