Unfair Tax Burden For Same-Sex Couples

Scales of JusticeIn my last post, I provided a long list of discriminatory practices allowed under the Defense of Marriage Act (“DOMA”).

In today’s post, I will share with you some of the discriminatory practices facing same-sex couples when it is time to file tax returns.

Whether or not you, as a gay or lesbian, are legally married in the state in which you reside, the federal government will not allow you to file a joint federal tax return, which often results in members of the gay community paying more in federal taxes.

And, if you are living in a state that recognizes your same-sex marriage, you then need to arrange for the filing of a joint State return, while at the same time, preparing individual Federal returns. This means that each partner has to file a separate individual federal tax return, and a joint state return. In order to receive certain state benefits to which you, as a couple, are entitled, however, you also need to prepare a placeholder joint tax return draft so that this information can then be used on the state return. For same-sex couples who are married, the filing of tax returns is complicated and almost assuredly requires the services of an accountant familiar with these issues.

Assume again you are living in a state that recognizes your marriage or provides for domestic partner health insurance benefits. Because of DOMA, the total cost of the health insurance premium being provided by one partner to the other, is fully taxable as income to the receiving partner. In other words, if the premium for one partner is $500 per month, he/she would need to add $6,000 of income on his or her federal return and pay the appropriate tax.

There is also an issue when same-sex couples have children. A straight couple merely lists its children as dependents and, if appropriate, can receive child care credits, education credits and the dependency exemption. Because of DOMA, these benefits are not available to same-sex couples.

One other important consideration is the unlimited marital deduction which allows a spouse to transfer assets to the other spouse without any tax consequences. This, too, is not available to same sex couples because of DOMA. Instead, gifts from one partner to the other can result in federal gift tax consequences.


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Ellen S. Fischer of the Law Office of Ellen S. Fischer has been working closely with individuals and families throughout the greater Philadelphia region for more than 20 years. Ellen received her Bachelor of Arts degree from Temple University and returned to earn a Juris Doctor degree from the Temple University School of Law. Ellen serves on a number of leadership committees and is a member of Gay and Lesbian Lawyers of Philadelphia (GALLOP). In addition to LGBTQ services, Ellen's practice areas are family law and personal injury.