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Gay couples could see windfalls from back payments on DOMA decision

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SAN FRANCISCO — For Mina Meyer and Sharon Raphael, two women in their 70s who fell in love more than four decades ago and have been married for more than four years, the U.S. Supreme Court's pending consideration of a law that prohibits the federal government from recognizing unions like theirs is about more than civil rights. It's about buying a new roof for their California home, replacing their 2005 Toyota Camry, and ensuring Meyer doesn't take a financial hit if Raphael dies first.

The Supreme Court will hear oral arguments this month in a challenge to a provision of the Defense of Marriage Act, or DOMA, that denies legally married gay and lesbian couples federal benefits available to heterosexual married couples, including tax and Social Security benefits. A decision is not expected until the end of June, but accountants and tax attorneys anticipating the 18-year-old law's demise are already encouraging same-sex couples like Raphael and Meyer to seek prospective tax refunds, back retirement payments and other spousal subsidies they may have been denied.

It is unclear how the justices might rule, but the Obama administration and former President Bill Clinton, who signed the act into law, have urged the court to overturn it on grounds that it violates the civil rights of gay Americans. DOMA supporters, including House Republicans led by Speaker John Boehner, argue that Congress — not the court — should decide as public opinion for same-sex marriage grows. Other conservative groups argue that spousal benefits should be reserved only for couples of the opposite sex.

Part of the urgency for couples to act stems from deadlines established under the U.S. tax code, which gives taxpayers three years to file protective claims for income and estate tax refunds. Same-sex couples or surviving spouses who were legally married before or during 2009 would therefore have until April 15 of this year to submit amended returns claiming overpayments on income for that tax year, said Vickie Henry, a senior staff attorney at Gay & Lesbian Advocates & Defenders.

At the time, gay unions were legal in Massachusetts, Connecticut, Iowa and Vermont, and briefly had been in California. New York and the District of Columbia, which have since legalized same-sex unions, also recognized marriages performed in other states or countries.

While married couples from those jurisdictions would have the strongest cases, couples from states such as Hawaii, Nevada and Illinois that treat domestic partnerships and civil unions as the same as marriage for tax purposes might also see federal refunds depending on how the Supreme Court rules, said Pat Cain, a federal tax expert at the Santa Clara University School of Law.

"On the income tax side, anybody who would benefit from filing jointly and who would be eligible to do so if DOMA falls should consider filing amended tax returns for the applicable years," Cain said.

The sums at stake are not inconsequential. The case the justices accepted, for example, involves a New York state widow, Edith Windsor, 83, who is seeking a refund of the $363,000 she had to pay in estate taxes after her wife, Thea Spyer, died in 2009. If Windsor had not been married to another woman, her tax bill would have been $0 because married U.S. citizens are allowed to pass their assets onto their spouses tax-free — but only if the surviving spouse is of the opposite sex.

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