April 26, 2024

Bucks Blog: How Supreme Court Decision Affects Gay Couples

The Cost of Being Gay

A look at the financial realities of same-sex partnerships.

Now that the Defense of Marriage Act, the federal law that defined marriage as a union between one man and one woman, has been dismantled, many same-sex couples will gain access to a long list of federal benefits that were previously only available to their opposite-sex peers.

An article in print and on The Times’s Web site outlines how same-sex couples will be affected. Here are more details.

Federal income taxes. As the story notes, married couples living in states where same-sex marriage is legal will be able to file joint federal returns. That should save some couples money, especially when one person earns much less than the other or does not work at all. High-income couples with two working spouses will probably pay more.

That said, filing jointly can make even lower-income couples ineligible for certain tax savings, like the earned-income tax credit. Ultimately, the tax consequences will depend on where couples live and what their income and particular circumstances are.

Couples who would have saved significant sums by filing jointly might want to consider amending their recent tax returns. Such amendments have been permitted for the last three tax years, according to Patricia Cain, a professor at Santa Clara University School of Law and an expert on sexuality and federal tax law. That means many taxpayers can refile for tax years 2010, 2011 and 2012. The three-year clock started on April 15 for people who filed on or before that date, she said, but those who received a filing extension have three years from the date they filed.

A married same-sex couple in which one spouse earns $100,000 and one stays at home with their child could save nearly $4,200 in federal taxes by filing a joint federal return, according to Pan Haskins, an accountant in Oakland, Calif., who works with gay couples. But domestic partners in community property states, where they already had the benefit of splitting income between their returns, would pay about $600 more than they do now.

Same-sex couples with high incomes will hit the top tax bracket of 39.6 percent faster when filing jointly. Individuals do not reach the highest bracket until they earn $400,000, but couples begin paying that rate on joint earnings above $450,000, Professor Cain said. People who think they are likely to reach that threshold can submit new W-4 forms with their employers to increase tax withholding.

What remains unclear is whether same-sex couples married in states where gay unions are legal could file joint federal returns after moving to a state where they are not. “There has been a lot of discussion about whether the I.R.S. could recognize someone married in Massachusetts but living in Georgia,” Professor Cain said. “I think they have the power to do that, but no one seems to think they will do that. I think they will wait for guidance from the White House.”

The other big question is whether same-sex couples in civil unions and registered domestic partnerships can file joint returns. The I.R.S. typically looks to the taxpayer’s state of residence to determine whether someone is married. But a letter from the office of the chief counsel of the I.R.S., written in 2011, states that an opposite-sex couple in a civil union in Illinois should be treated as married for federal tax purposes. “The I.R.S. would have the power to interpret the word spouse,” Professor Cain said, adding that the Internal Revenue Code does not define it.

Medicaid. Having a federally recognized marriage can help or hurt an individual when it comes to Medicaid programs, “or perhaps even some of both,” said Vickie Henry, a senior staff lawyer at Gay and Lesbian Advocates and Defenders. The fact that both spouses’ incomes will be used to determine eligibility may hurt some couples. But if one spouse is in a nursing home or other long-term care institution, the couple may benefit from Medicaid’s “spousal impoverishment” provisions, which shield some of the household’s combined assets from the program’s reach so that the healthy spouse can continue to tap those resources.

Medicare. Individuals may be eligible for free Part A coverage, which generally covers hospital services and nursing homes, based on a spouse’s earning record, according to the Medicare Rights Center. Married people may also be able to delay enrolling in Part B coverage, which covers things like preventative visits to the doctor, while a spouse is still working and for up to eight months afterward. Before, individuals who were on a same-sex spouse’s plan but did not sign up for Medicare in the year they turned 65 had to pay a penalty for every year they were not covered by Part B or insurance as a result of their own work.

How will the decision affect you and your family?

Article source: http://bucks.blogs.nytimes.com/2013/06/26/how-supreme-court-decision-affects-gay-couples/?partner=rss&emc=rss

Bucks Blog: Same-Sex Marriage and Personal Finances: Further Reading

Edith Windsor, the plaintiff in the Defense of Marriage Act case, appeared on the steps of the Supreme Court after the ruling.Christopher Gregory/The New York Times Edith Windsor, the plaintiff in the Defense of Marriage Act case, appeared on the steps of the Supreme Court after the ruling.

The Cost of Being Gay

A look at the financial realities of same-sex partnerships.

Today’s Supreme Court decisions on gay marriage raise new questions about the expansion of rights and benefits to same-sex couples. Tara Siegel Bernard, in her series on this blog and in Your Money columns, has examined the complicated personal finance issues surrounding gay marriage and Social Security, income and estate taxes, health insurance and other factors that will change along with marriage laws. We have gathered the most relevant articles and blog posts here.

Continuing coverage is also available on the Bucks blog as part of the series “The Cost of Being Gay.”

Article source: http://bucks.blogs.nytimes.com/2013/06/26/same-sex-marriage-and-personal-finances-further-reading/?partner=rss&emc=rss

Bucks Blog: Yale and Columbia Reimburse Gay Employees for Extra Taxes

Two Ivy League universities will soon begin reimbursing some of its gay and lesbian employees for the extra taxes they incur when their partners are covered by their health insurance.

The Cost of Being Gay

A look at the financial realities of same-sex partnerships.

Both Columbia and Yale University will begin covering these extra costs on Jan. 1.

Heterosexual married couples don’t owe the tax because they are viewed as an economic unit in the eyes of the federal government. But under federal law, employer-provided health benefits for domestic partners are counted as taxable income (if the partner is not considered a dependent),  so same-sex couples are taxed on the value of the coverage. On top of that, the employees cannot use pretax dollars to pay for their premiums, unlike their opposite-sex married counterparts.

Over the last couple of years, an increasing number of employers have begun to reimburse their gay and lesbian employees because they cannot avoid the tax by getting married (at least for federal purposes). We’ve been keeping tabs on the growing number of companies who are adopting the policy on this chart.

Yale, which is in Connecticut, where same-sex marriage  is legal, will cover at least a portion of the costs for employees with same-sex spouses and those who are joined by a civil union (employees who merely have same-sex domestic partners are not covered). In addition, the benefit will only be extended to employees whose spouses are not eligible for coverage elsewhere.  And instead of calculating each person’s liability, it will pay eligible employees $125 a month, or $1,500 a year, to cover the costs, a figure it came up with by averaging the costs across employees.  The payments will be included in each paycheck.

The inequity became readily apparent last year, when Yale’s payroll system made an error and failed to withhold these taxes. Employees who were affected received a letter that said the university would pay the tax and deduct the amount it paid from employees’ future paychecks, which some employees said they felt wasn’t fair.

Columbia University, which is in New York, another state where gay marriage is legal, said it would pay eligible employees with same-sex partners $1,000 over the course of the year. The policy will go into effect next year for nonunion salaried employees. The benefit would need to be negotiated through collective bargaining for unionized employees, a Columbia spokesman said.

Columbia and Yale join Bowdoin College, which adopted the policy in 2010, and Syracuse University, which began reimbursing its employees in January 2011. Syracuse calculates each eligible employee’s individual liability and then pays up to $1,000 over the year. Graduate assistants are also covered, but they receive their credit as a lump sum at the end of the calendar year.

Do you know of any other universities that have adopted similar policies?

 

Article source: http://feeds.nytimes.com/click.phdo?i=f9236f092cc4735757d6ae7017a98095

San Diego Union-Tribune Sold to Hotelier for More Than $100 Million

Doug Manchester, the chairman of the Manchester Financial Group, bought The Union-Tribune from Platinum Equity, a private equity firm that acquired it in 2009 from its long-time owners, Copley Press, a family-controlled company.

In a brief interview with voiceofsandiego.org, Mr. Manchester, an outspoken supporter of conservative causes, confirmed the approximate price, adding that “the asking price was a lot higher than that.” He declined to comment further, saying the parties in the sale had agreed to stay silent until the deal was completed between Nov. 30 and Dec. 15.

The Union-Tribune, like many American newspapers, has suffered from the economic downturn and the defection of readers and advertisers to the Web. The paper has a weekday circulation of nearly 220,000 and a weekend circulation of nearly 300,000, according to recent reports from the Audit Bureau of Circulations.

In a statement, Mr. Manchester said: “Taking ownership of a 143-year-old Pulitzer Prize-winning news organization comes with great responsibility. We believe San Diego is the finest city in America and pledge to be strong advocates for the city’s interests and conscientious caretakers of The Union-Tribune and its legacy.”

The Manchester Financial Group, its Web site says, has a range of investments including two of the largest hotels in the United States: the Manchester Grand Hyatt San Diego and the San Diego Marriott Hotel and Marina. Mr. Manchester’s hotels were the target of a boycott in 2008 over his $125,000 donation to support a ballot initiative in California to prohibit same-sex marriage in the state.

A statement issued by The Union-Tribune did not disclose the terms of the agreement, saying that the company would not comment on the sale until the ownership transfer was complete. Representatives from Platinum Equity also declined to comment. A Wall Street Journal article in July said the private equity firm paid “a nominal amount, of less than $50 million,” when it bought the paper in 2009.

In its statement, The Union-Tribune highlighted the steps Platinum had taken to improve the newspaper’s operations, including hiring Ed Moss as publisher and president, lowering advertising rates for small businesses, increasing local news coverage in San Diego communities and starting Vida Latina San Diego, a Spanish-language entertainment magazine.

Mr. Manchester explained that his opposition to same-sex marriage at the time of the ballot initiative was a matter of faith: “This really is a free-speech, First Amendment issue. While I respect everyone’s choice of partner, my Catholic faith and longtime affiliation with the Catholic Church leads me to believe that marriage should be between a man and a woman.”

Article source: http://feeds.nytimes.com/click.phdo?i=759f26664bc4b53b6ac8f907e75f3d6d

Bucks: What a Repeal of the Gay Marriage Ban Means

What if You're Gay - Your Money - Bucks Blog - NYTimes.com

As gay couples know all too well, there’s a long list of federal benefits, both financial and legal, that are available only to straight couples. Social Security spousal survivor benefits. Less expensive health care options. The ability to file one set of tax returns. And the list goes on.

So let’s imagine for a moment that the federal law that defines marriage as between a man and a woman was struck down tomorrow. Would same-sex couples then be able to get married at their local court house and gain all the same rights as their opposite-sex counterparts, at least for financial and legal purposes?

Not entirely. The law in question — the Defense of Marriage Act, enacted in 1996 — has two main parts: Section 3 defines marriage as a legal union between a man and a woman, while Section 2 allows states to refuse to recognize same-sex marriages performed elsewhere.

Still, even if the entire law disappeared, gay couples would still need to get married in one of the five states, or the District of Columbia, that perform same-sex marriages. But if they went back home to a state that did not recognize their union, they would still be strangers in the eyes of that state’s government. The couple would need to continue to file their state income tax returns separately, for instance.

But this is where it gets tricky. There could also be some confusion about what sort of federal benefits the couple is entitled to receive if they live in a state that does not recognize their union. Why? The federal government typically looks to the states to define marriage. And though states generally honor opposite-sex marriages performed elsewhere, many states specifically ban same-sex marriage.

“There is the possibility that, even without DOMA on the books at all, that a married same-sex couple might not be treated as married by the federal government as to some particular program, benefit or obligation because of simply how the particular federal program determines eligibility in looking to state law to see if a person is married or not,” said Gary Buseck, legal director of Gay Lesbian Advocates Defenders.

Consider a fictitious couple, Will and Henry. The couple was married and lived in Massachusetts but decided to retire to Florida, where they’ll apply for Social Security. The agency will look to determine the status of their marriage under the law of the state where they live on the date of application for the benefit, Mr. Buseck said. And Florida won’t deem them married.

But legislators have come up with a fix. The Respect for Marriage Act, which was introduced in both the House and Senate in March, repeals the Defense of Marriage Act and  also includes a provision — known as “certainty” — that says marriages that are valid in the state where the couple got married will be recognized in other states for the “purposes of any federal law in which marital status is a factor.”

“You don’t want to end up with this perverse result where a couple leaves a marriage recognition state to retire or take another job and those federal benefits suddenly stop flowing,” said Brian Moulton, chief legislative counsel for the Human Rights Campaign.

Technically speaking, he said, the repeal of the Defense of Marriage Act on its own should be enough for couples to receive federal recognition. But the certainty provision would also protect couples if a less gay-friendly administration interpreted the repeal more narrowly, and only recognized same-sex marriage for couples who lived in states that recognized their marriage. Mr. Moulton said that his organization was still working with members of Congress to build support for the bill, and educating them about “the concrete harms that DOMA has done to same-sex couples.”

Even if the efforts for repeal were successful, only couples living in states that recognized gay unions would achieve most of the benefits afforded to straight married couples. Indeed, there are 29 states with constitutional amendments that define marriage as between a man and a woman, while another 12 states have similar statutory provisions, he added.

The legislation, for instance, doesn’t require states to grant state-level rights. Nor does it require states that haven’t recognized same-sex marriages to do so.

The courts may ultimately address the issue before Congress does, since there are several federal court cases where the constitutionality of the Defense of Marriage Act is being challenged. The Justice Department has said it would no longer defend the law in court, but House Republicans have said that they would work to do so.

What other federal benefits might rely on a state’s definition of marriage?

Article source: http://feeds.nytimes.com/click.phdo?i=ff0ae9c86d186ca7f42e2a827b8ad131