US recognizes same-sex couples under tax laws

WASHINGTON – The US Treasury on Thursday recognized gay marriage under tax laws, giving the same tax benefits to legally married same-sex couples that heterosexual couples enjoy.

The landmark ruling applies to all lawfully married same-sex couples in the country, even if they live in states that do not recognize the marriage.

Previously, legally married same-sex couples had to file their federal income tax returns declaring themselves “unmarried,” losing out on a broad range of benefits and protections, including transfers of property, gifts and inheritances.

“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,” Treasury Secretary Jacob Lew said in a statement.

“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.”

Gay couples will be able to, for example, claim exemptions – which reduce taxable income – that favor married couples over single people.

A case in point: The tax code provides an automatic deduction for taxable income. In 2012, single taxpayers could take a standard $5,950 deduction.

But for married couples filing jointly, even if only one person is working, the deduction was doubled to $11,900, effectively bringing down their tax bill.

The ruling came in response to a US Supreme Court decision on June 26 that struck down the 1996 Defense of Marriage Act, which denied federal benefits to married gay and lesbian couples by strictly defining marriage as a union between a man and a woman.

As a result the federal government was allowed to recognize same-sex couples in all federal matters, such as sharing pension benefits — the issue that brought the case to the highest court.

Although marriage remains a legal issue governed by individual states in the US, the Treasury and the Internal Revenue Service made clear that its tax treatment of gay married couples will apply whether they live in states that recognize gay marriages or those that do not recognize the marriages.

Thirteen of the 50 US states have legalized same-sex marriage while about 30 states have decreed that marriage can only exist between a man and a woman.

The District of Columbia, or Washington, the US capital, also authorizes it.

A senior Treasury official, who spoke on condition of anonymity, said it did not make administrative sense to have a patchwork of federal tax filings with some states recognizing legal same-sex marriages and others not.

Same-sex couples will still have to file their state tax returns according to that state’s laws, the official added.

The ruling which takes effect on September 16, does not apply to registered domestic partnerships, civil unions, or similar relationships recognized under state law.
“With today’s ruling, committed and loving gay and lesbian married couples will now be treated equally under our nation’s federal tax laws, regardless of what state they call home,” Chad Griffin, president of Human Rights Campaign, said.

“These families finally have access to crucial tax benefits and protections previously denied to them under the discriminatory Defense of Marriage Act.”

New York Mayor Michael Bloomberg, who has fought for gay marriage rights, cheered the move.

“Today, through something as seemingly banal as a tax code change, the Obama Administration made marriage equality a national right and further advanced America’s march of freedom,” he said in a statement.

“No longer will the validity of one’s marriage be, in the eyes of the federal government, dependent upon the gender of a partner.”