by James A. Woehlke, Esq., CPA
On June 26, the Supreme Court in a 5-4 decision declared the Defense of Marriage Act to be unconstitutional. DOMA required the U.S. government to recognize only heterosexual marriages when applying references in federal statutes and regulations to “marriage” and “spouse”. This meant that same-sex married couples could not, among many other things,
- use the tax return filing statuses of “Married Filing Jointly” or “Married Filing Separately”,
- have the benefit of estate or gift tax spousal deductions, and
- set up “spousal IRAs”.
In the benefits area, the elimination of DOMA will include the following:
- Same-sex, married individuals employed by the government will now be able to take advantage of employee benefits offered to spouses.
- Previously, employer contributions benefitting the spouses of employees in same-sex marriages – employer funding of health insurance premiums in the “employee and spouse” or “family” insurance tiers – were not exempt from tax. This meant that these contributions resulted in taxable income to the extent they benefitted the same-sex spouse. Going forward, these contributions will be tax-exempt, as is the case for heterosexual couples.
- Similarly, flexible spending account payments on behalf of same-sex spouses were not qualifying expenditures; but will become so.
- For Medicaid purposes, it is a mixed bag, causing some couples to no longer qualify while other features of Medicaid available to spouses would become available.
- For Social Security, same-sex spouses will now be able to qualify for survivor benefits.
For more information on the impact of the DOMA repeal on benefits, see the Kaiser Health News account at http://www.kaiserhealthnews.org/Daily-Reports/2013/June/27/doma-decision.aspx.
What the Rejection of DOMA is NOT
The Supreme Court did not go so far as to declare same-sex marriages to be a Federally guaranteed right. It did not toss out any state’s rejection of same-sex marriages. At present, twelve states plus the District of Columbia recognize same-sex marriage; 35 states explicitly reject same-sex marriage.
Also on June 26, the Supreme Court tossed out a case about the voter-approved California same-sex marriage ban. But that case did not take a stand on the ban itself. The court merely held that the person who brought the appeal to defend the California same-sex marriage ban did not have “standing” to bring the case. In other words, the ban was defended by a person who had no right to be in court on that issue.
Sorting out these issues will require further litigation.