Many benefits for N.H. couples in same-sex marriage decision
Due to yesterday’s U.S. Supreme Court ruling, married same-sex couples in New Hampshire and their peers in 11 other states will gain the benefits of marriage – hospital visitation rights, immigration rights and the right not to testify against each other in court.
It all started, however, with the tax code.
The case decided yesterday began when New Yorker Edith Windsor’s wife, Thea Spyer, died and she was ordered to pay $363,000 in taxes on Spyer’s estate. No one has to pay taxes on a bequest valued at less than $5 million, but under federal law, spouses don’t have to pay estate taxes on any amount, so Windsor asked the IRS for a refund.
Not just because it was the issue that sparked the case, but because it’s the most tangible and impossible to predict of the new benefits, “the first thing (same-sex) couples should do now is look at their estate planning: what was it before and what could it be now,” said Mike Bonacorsi, an Amherst-based certified financial planner.
But in addition to the estate tax Windsor appealed, the law applies to and influences the enforcement of more than 1,000 other federal statutes, including, according to the majority decision, Social Security, housing, criminal sanctions and veterans benefits.
The ruling means a surviving spouse would now be eligible for his or her deceased spouse’s Social Security benefit, an option until now denied to them.
“If the surviving spouse has a lower benefit, they can’t take advantage of that higher rate. It’s a huge, huge benefit for people,” Bonacorsi said.
“But the biggest benefit is they no longer have to file their annual returns as individuals, they’d be able to file jointly, so they’d be eligible for the federal married couple rate,” he said.
The couple could benefit from filing jointly if only because they’d only have to prepare or pay someone to prepare one tax return instead of two, he said.
It’s not a benefit every couple will feel equally, though. After household income tops $142,700, the tax rate for a married couple is higher than it would be for two people earning that much but filing separately, according to Beth Fowler, an attorney at McLane Law Firm.
Yesterday’s decision does not affect a section of the law that allows states to refuse to recognize marriages performed in other states. So if a couple married in New Hampshire or any of the 11 other states where same-sex marriage is legal were to move to a state where it is not, they may lose their federal status as a couple. (The District of Columbia also recognizes same-sex marriages.)
That leaves many questions unanswered, said John Rich, an attorney at McLane Law Firm.
If one member of a couple married under New Hampshire’s law works for a company with branches in other states that don’t recognize same-sex marriage, will their benefits cease with a transfer to those branches? If a couple is married in a state that allows same-sex marriage and moves to a state that doesn’t, do their federal benefits – like Social Security survivors benefits – move with them? Rich didn’t know, and he said that kind of uncertainty can be troubling to employers.
Other impacts of the decision come from the way insurance and other nonsalary benefits are considered under federal law.
Same-sex spouses didn’t count as dependents, so those couples paid taxes on health benefits that other married couples didn’t face, including taxes on health savings accounts and employer-sponsored premiums, Rich said.
Rich said yesterday he doesn’t know when the IRS will issue guidance on the new federal regulations, but he expects it will come soon.
“In the past, the IRS has issued guidance fairly quickly. For issues affected by the Oklahoma tornadoes (in late May), they issued their guidance this week, and (the ruling) is an issue of national implications. I would suspect they have been working on it already,” Rich said. “I know the IRS isn’t everyone’s favorite government agency right now, and I have no inside information, but I expect they have been giving it thought already and could issue them soon.”
(Sarah Palermo can be reached at 369-3322 or
firstname.lastname@example.org or on Twitter @SPalermoNews.)