How Same-Sex Finances Change After Supreme Court Rule

Alexa Pugh
Posted

same-sex weddingWedding vows taken by same-sex couples will now mean a bigger break for their finances.

Thanks to a ruling by the U.S. Supreme Court that struck down the 1996 Defense of Marriage Act, all married citizens will now have access to federal marriage benefits previously reserved for opposite-sex couples.

“The federal statute is invalid, for no legitimate purpose overcomes the purpose and effect to disparage and injure those whom the State, by its marriage laws, sought to protect in personhood and dignity,” Justice Anthony Kennedy wrote in the ruling announced Wednesday.

The Supreme Court also ruled Wednesday on Hollingsworth v. Perry, which will likely make same-sex marriage legal in California once again. But “the decision in the DOMA case will have a much clearer and more immediate practical effect,” says Margaret Russell, professor of law at Santa Clara University in Santa Clara, Calif.

What the Rulings Mean for Benefits

The issue of DOMA’s constitutionality was brought to the court in Windsor v. United States. Edith Windsor originally filed the suit after she was charged $363,000 in estate taxes following the death of her wife because same-sex couples previously did not qualify for the federal tax exemption available to opposite-sex couples.

In accordance with the court’s ruling, the 40% tax on estates over $5.25 million, which originally cost Edith Windsor, will now be a thing of the past for same-sex couples.

At least 82,500 gay couples have wed in states that allow it since same-sex marriage was first legalized in Massachusetts in 2004, according to The New York Times.

Among the other benefits that will be extended to same-sex couples in states that allow them to marry is the ability to file a joint income-tax. By filing together, the spouse who earns less will qualify the couple to be included in a lower tax bracket, meaning big savings for couples with disparate incomes.

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