Marriage and Taxes

You’ve probably seen news stories about the Supreme Court arguments this Tuesday and Wednesday in the gay marriage cases, Hollingsworth v. Perry and Windsor v. United States. This blog doesn’t take political positions, but the Windsor case presents an interesting marriage and tax question. Windsor involves a lesbian couple who were legally married in New York, where one of the spouses died, and the surviving spouse tried to claim a marital deduction for estate tax purposes. One of the federal tax benefits to being married is that the surviving spouse can claim a marital deduction on the estate tax. The government denied the marriage tax benefit in Windsor because under federal law (the Defense of Marriage Act (1996) (“DOMA”)), marriage is defined as between 1 man and 1 woman, so a lesbian couple isn’t married under federal law. So Ms. Windsor, the elderly widow from New York, doesn’t get the marriage tax benefit, even though she was legally married under New York law (marriage is a state law issue, and New York allows same-sex marriage). Ms. Windsor sued the government, arguing that DOMA is unconstitutional, because it prevents her from receiving the tax benefit she would get if federal law recognized her as legally married (like New York’s law did).

So does Ms. Windsor get her tax benefit, does DOMA’s marriage definition fall, or will something else happen? We will know by the end of June, when the Court issues its opinions. Ms. Windsor’s case may well join the annals of tax law stories.

If my office, Johnson Law KC LLC, can help you navigate the complex labyrinth of tax law and estate planning, give me a call (913-707-9220) or email (steve@johnsonlawkc.com) for a convenient free consult.

(c), 2013, Stephen M. Johnson, Esq.

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