The United States Treasury and the Internal Revenue Service recently announced that legally married same-sex couples would receive equal tax treatment and benefits alongside legally married heterosexual couples. This landmark ruling follows the June defeat of DOMA and Prop 8 and continues the trend towards marriage equality in the U.S.
Equal treatment applies to same-sex couples who have been married in statea where same-sex marriage is legal. Included in the protections are same-sex couples who reside in states that do not recognize marriage equality like Pennsylvania or New Jersey, but who married in states that do like Delaware or New York. Equal treatment will include inheritances, estates, and claiming income or child credits. Legally married same-sex couples will avoid paying estate or inheritance taxes that they would have been subject to before. They can also cover their spouses on a pre-tax basis through employer-provided insurance in the same way that heterosexual couples have always been able to do. However this also means that same-sex couples will now be subject to the increase in tax for couples who file jointly, known as the “marriage penalty.”
The Congressional Budget Office said in 2004 that it could grow revenue by $400 million over five years if the 1.2 million individuals in same sex couples at the time were considered equal with partners in heterosexual marriages under the tax code. To be clear though, no domestic partnerships, civil unions, or other similar committed relationships are covered under these new protections. But for those covered, the Treasury and the IRS are allowing legally married couples to file amended returns for one or more years.