Government Gives Across-the-Board Tax Benefits to All Legal Same-Gender Marriages

Decision from IRS, Treasury Dept. wasn't a guarantee after the Supreme Court's overturning of DOMA.

By Chris Hoenig


If there's a federal tax law where marriage is a factor, all legally married same-gender couples will be treated as a married couple, regardless of where they live.

"Married LGBT couples will now have access to all the same federal tax benefits, privileges and potential liabilities as a married heterosexual couple," Wells Fargo Advisors First Vice President Kyle Young told DiversityInc. Young is one of the writers of a regular column from Wells Fargo (No. 25 on the DiversityInc Top 50 Companies for Diversity) providing financial insight for LGBT couple that appears on DiversityInc.com.

The guidelines, announced by way of a Treasury Department press release, cover legally recognized marriages that took place in any of the states that allow same-gender marriages, as well as Washington, D.C., or any U.S. territory. Same-gender couples legally married in a foreign country are also treated as married for tax purposes under the new rules.

"Today's ruling provides certainty and clear, coherent tax-filing guidance for all legally married same-sex couples nationwide. It provides access to benefits, responsibilities and protections under federal tax law that all Americans deserve," said Treasury Secretary Jacob Lew. "This ruling also assures legally married same-sex couples that they can move freely throughout the country knowing that their federal filing status will not change."

Not only can same-gender couples now file joint tax returns (or under "married filing separately" status), but all other federal tax provisions are also applied equally. These include gift and estate taxes, personal and dependency exemptions, standard deduction and employee benefits, IRA contribution, and earned-income tax-credit or child-tax-credit claims. In addition, employees who purchased health-insurance coverage from their employer for their spouse on an after-tax basis can treat those payments as pre-tax and exclude them from income.

All legally married same-gender couples can file amended tax returns under IRS guidelines, going as far back as tax year 2010 for some. Amended returns are not required to be filed.

While the new guidelines provide clarity and federal benefits for married LGBT couples, there are couples who will still not have the same tax benefits. "I do not believe the decisions today will have any impact at all on same-gender civil unions or domestic partnerships," Young said. This includes in states like New Jersey, where civil unions are treated as the equivalent of marriage on the state level, but not by the federal government.

Not a Slam Dunk After DOMA Ruling

A twisted maze of federal guidelines meant that there was no guarantee that all legally married same-gender couples would enjoy federal tax benefits after the Supreme Court overturned the Defense of Marriage Act (DOMA) in June.

Some federal agencies determine a couples' marital status based on the state they reside in. Under those guidelines, same-gender couples who were legally married in one state but live in a state that doesn't recognize the marriage (married in New York but live in Kansas, for example) would not be treated as a married couple, regardless of the Supreme Court's ruling. "Historically, the IRS has used one's state of residence to determine applicable tax rules/regulations. If the IRS had decided to continue this thinking, it is believed that only those LGBT couples residing in one of the 13 states that recognize same-gender marriages would have access to federal tax rules and protections," Young said. "The rulings announced today paint a much brighter picture for some LGBT married couples."

Some couples, but not all. "There are many couples that may find additional tax liabilities associated with the newfound married filing status," Young said.

The Department of Defense, Department of Veteran Affairs, and Immigration and Customs Enforcement (ICE) are some of the agencies that have typically used the state in which the couple was married, or "state of celebration," as their guideline for determining marital status.

Celebrate Pride Month!  ADP Promotes Diversity and Inclusion with LGBTQ Employee Self-Identification

Self-identification can help companies to better develop programs and benefits that meet the needs of LGBTQ associates and to better attract and retain a diverse talent pool to stay competitive in today's tight labor market.

Originally Published by ADP.

Numerous studies have shown that having a diverse workforce brings a wider range of opinions to the table which leads to better problem solving and drives innovation. But to benefit from diverse perspectives, companies first need to understand the makeup of their employee population beyond gender, ethnicity and race.

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Ruling in Colorado Bakery Case Sends Message About Discrimination

The Supreme Court made it clear that you cannot target people based on religion or sexual orientation — but left the future of similar cases in limbo.

David Mullins (L) and Charlie Craig / REUTERS

The United States Supreme Court ruled on Monday morning in favor of a baker hailing from Colorado who refused to bake a cake for a gay couple. The victory is a shaky one, though, as it deflected from the broader issue.

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White Officer Called Black Police Chief N-Word, Threatened to Beat Her to 'Death With a Banana'

Despite proof of a series of racist and threatening Facebook posts against Tiffany Tims, an Ohio officer hasn't been fired.

Screenshot from Facebook Messenger / WCMH NBC4

UPDATE May 30, 2018 at 10:38 p.m. ET:

On Wednesday night the Nelsonville City Council unanimously voted to fire police officer Joshua Braglin. The vote came during a city council meeting attended by numerous protesters.

ORIGINAL STORY

A white male police officer from Southeastern Ohio made racist and threatening Facebook posts against Hocking College Interim Police Chief Tiffany Tims, who is Black. Nelsonville Police Officer Joshua Braglin hasn't been fired. So, community organizers have scheduled a protest for Wednesday evening.

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Lesbian Latina Sets Out to Make History and Oust Anti-LGBT Texas Gov.

Lupe Valdez, former sheriff of Dallas County, is the first openly gay and Latina to win a major party nomination for governor in Texas.

REUTERS

A new sheriff may soon be in town in Texas, and she's already making history.

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Vickers "Vic" Cunningham, a former Dallas judge who's running in the Republican primary runoff election for Dallas county commissioner on Tuesday, decided to provide his children a monetary incentive to condone homophobia and racism. Cunningham set up a living trust with a clause rewarding his children if they marry a white, straight Christian.

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Reason 1,000 Why Ben Carson Gets a Side Eye — HUD Is Being Sued by Civil Rights Groups

Carson is under fire for sidelining a housing regulation rule that discourages racial segregation.

President Donald Trump appointed Ben Carson secretary of the Department of Housing and Urban Development (HUD) without any prior experience except that Carson "grew up in an inner city." Now Carson is leaving the door wide open for housing discrimination.

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Lynching Memorial and Museum Opening Highlights America's Racist Past, Parallels Today's Killings of African Americans

"We're dealing with police violence. We deal with these huge disparities in our criminal justice system. You know, if everything was wonderful you could ask the question, 'Why would you talk about the difficult past?' But everything is not wonderful."

@nullafacente_/INSTAGRAM

Hundreds of people lined up in the rain to experience a long overdue piece of American history and honor the lives lost to lynching at the National Memorial for Peace and Justice and the Legacy Museum in Montgomery Alabama on Thursday.

The Equal Justice Initiative, sponsor of this project, has documented more than 4,000 "racial terror" lynchings in the United States between 1877 and 1950.

The first memorial honoring the victims includes sculptures and art depicting the terror Blacks faced; 800 six-foot steel, engraved monuments to symbolize the victims; writings and words of Toni Morrison and Dr. Martin Luther King, Jr.; and a final artwork by Hank Willis Thomas capturing the modern-day racial bias and violence embedded in the criminal justice system and law enforcement.

Among memorial visitors were civil right activist Rev. Jesse Jackson and film director Ava Duvernay. According to the Chicago Tribune, Jackson said it would help dispel the American silence on lynchings, highlighting that whites wouldn't talk about it because of shame and Blacks wouldn't talk about it because of fear. The "60 Minutes Overtime" on the memorial just three weeks earlier was reported by Oprah Winfrey, who stated during her viewing of the slavery sculpture, "This is searingly powerful." Duvernay, quoted by the Chicago Tribune, said: "This place has scratched a scab."

The Montgomery Downtown business association's President, Clay McInnis, who is white, offered his thoughts to NPR in reference to his own family connection to the history that included a grandfather who supported segregation and a friend who dismantled it. "How do you reconcile that on the third generation?" he asked. "You have conversations about it."

A place to start: The Montgomery Advertiser, the local newspaper, apologized for its racist history of coverage between the 1870s and 1950s by publishing the names of over 300 lynching victims on Thursday, the same day as the memorial opening. "Our Shame: the sins of our past laid bare for all to see. We were wrong," the paper wrote.

The innumerable killings of unarmed Black men and the robbing of Black families of fathers, mothers, and children today not only strongly resemble the history of lynchings, but also bring up the discomfort and visceral reactions that many have not reckoned with.

Bryan Stevenson, founder of the Equal Justice Initiative and the man who spearheaded this project, told NPR: "There's a lot of conflict. There's a lot of tension. We're dealing with police violence. We deal with these huge disparities in our criminal justice system. You know, if everything was wonderful you could ask the question, 'Why would you talk about the difficult past?' But everything is not wonderful."

WFSA, a local news station, interviewed a white man who had gone to see the Legacy Museum downtown, also part of the EJI project, located at the place of a former slave warehouse. He talked about how he was overwhelmed by the experience and that "Slavery is alive in a new way today."

Reactions on social media were reflective of the memorial's power and the work that is continuing toward progress.

During a launch event, the Peace and Justice Summit, Marian Wright Edelman, activist and founder of the Children's Defense Fund, urged the audience to continue their activism beyond the day's events on issues like ending child poverty and gun violence, according to the Chicago Tribune: "Don't come here and celebrate the museum ... when we're letting things happen on an even greater scale."

Perhaps the reason to honor and witness the horrific experiences of our ancestors is to seal in our minds the unacceptable killings of Blacks today, and the work we ALL have to do now to stop repeating the past.