RSS
How the Supreme Court's DOMA ruling helps same-sex couples' finances
Cha-ching!
 
Same-sex couples will be able to file income tax returns jointly, which could translate into thousands in savings for some.
Same-sex couples will be able to file income tax returns jointly, which could translate into thousands in savings for some. Justin Sullivan/Getty Images

On Wednesday, the Supreme Court ruled that the 17-year-old Defense of Marriage Act is unconstitutional, opening a floodgate of benefits that same-sex married couples will now get to enjoy along with heterosexual married couples. Many of these estimated 1,138 benefits will mean more money in the bank. Here are a few of those changes:

Joint income tax returns: Same-sex couples will now be able to file joint income tax returns, combining their incomes and deductions, and in cases where one spouse makes significantly more, knocking both down to a lower tax bracket. This can translate into thousands of dollars in savings.

Protective refund claims: Couples already married in their states will be allowed to collect refunds on estate or income taxes they paid under DOMA back to 2009. They will also be able to collect extra taxes they paid when DOMA required they buy a home in one person's name.

Survivors' benefits: Same-sex couples will now be eligible for the average $1,184 in monthly Social Security survivors' benefits that heterosexual couples receive in the event of a spouse's death. The Social Security Administration also provides surviving spouses a one-time payment of $225 to help with expenses like burials—a benefit same-sex couples will now receive as well.

Estate tax: Currently, a surviving spouse in a same-sex marriage is charged 35 percent estate tax for anything over $5 million when their spouse dies, while heterosexual spouses are charged nothing. The DOMA decision will allow same-sex couples to pay nothing as well.

Gift tax: Heterosexual couples have always been able to give each other unlimited gifts of cash, tax free. For same-sex spouses, on the other hand, any gift of more than $14,000 was added to a lifetime limit of $5.25 million. If the sum of gifts reached that number, the couple was hit with a 40 percent tax. Without DOMA, members of same-sex couples will now be able to transfer money to one another without paying a gift tax.

Medical benefits: Though 40 percent of Fortune 500 companies already offer tax-free employer-provided health benefits to domestic partners, many same-sex couples still have to pay taxes when using their partner's health insurance plan. With the DOMA decision, they'll be entitled to the same benefits tax-free.

 
Carmel Lobello is the business editor at TheWeek.com. Previously, she was an editor at DeathandTaxesMag.com.

THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER

Subscribe to the Week