Some Tax Breaks Unavailable to Same-Sex Couples
Tax season provides a stark reminder for same-sex couples: Their families receive second-tier status when it comes to filing their federal tax returns, and many of them, particularly those with children, pay more in taxes than their heterosexual peers, a new study says.
The study, co-authored by three research and advocacy groups, lists many disadvantages that families headed by same-sex couples confront because the federal government defines marriage as between one man and one woman. Since their families don’t fit within that definition, they are forced to answer complex financial questions. What’s the best way for each partner to file, for instance, since they cannot file jointly? Who should claim the children? The study also found that these families are often precluded from taking certain tax breaks or they don’t receive their full benefits.
“Although most federal and state policies are designed to promote family unity, the lack of federal tax recognition for lesbian, gay, bisexual and transgender families does just the opposite,” said the report, “Unequal Taxation and Undue Burdens for L.G.B.T. Families,” which was conducted by the Movement Advancement Project, the Family Equality Council, and the Center for American Progress. “It forces parents that share a home, meals, and parenting responsibilities to break their family apart to file separate tax forms.”
As a result, these families often need to rely on costly accountants with expertise in this area. On top of that, in some states, only one parent can establish ties to the couple’s child. Besides creating obvious legal problems, it may also prevent the family from accessing certain tax breaks, according to the report.
Being unable to file jointly means that many families headed by gay couples, particularly those where there is only one breadwinner or where there is a big disparity in the parents’ income, pay more in taxes.
But getting married doesn’t always result in a lower federal tax bill. In fact, families headed by same-sex partners with similar incomes might actually save money by remaining single if pooling their income would push them into a higher tax bracket. In other instances, not marrying could allow at least one partner to qualify for tax breaks that would have been out of reach if the combined their incomes. Or, it could have prevented them from having to pay the dreaded alternative minimum tax or other “marriage penalties.”
But, as many gay families argue, straight couples have the right to choose whether they want to marry — and that union is recognized no matter where they go. And while six states plus the District of Columbia have legalized same-sex marriage and another nine states provide many of the same rights, the union doesn’t hold in the eyes of the federal government.
“The fact is that L.G.B.T. families don’t get a fair deal when it comes to taxes, whether you are paying more, paying less or paying the same,” said Jennifer Chrisler, executive director of the Family Equality Council, “because we don’t have the same recognition.”