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HRC's Brian Moulton discusses the impact of IRS policy changes on married same-sex couples.
As a result of the June 26, 2013 declaration by the U.S. Supreme Court that section 3 of the Defense of Marriage Act is unconstitutional, new bureaucratic and judicial rulings have extended important benefits to same-sex couples. The Pentagon and the Office of Personnel Management acted quickly to rewrite regulations to make certain that same-sex and opposite-sex married couples were treated equally in the armed services and the federal work force. New regulations announced on August 30, 2013 by the Internal Revenue Service and the Department of Health and Human Services will insure that married same-sex couples will be able to have the same options that married opposite sex couples have in filing taxes and receiving medicare benefits. In addition, a court ruling has declared unconstitutional a statute that barred the Veterans Administration from extending equal benefits to married gay and lesbian couples.
On July 17, 2013, the Office of Personnel Management, which oversees the benefits offered to federal employees, announced that as a result of the Supreme Court ruling that dismantled DOMA, it is now able to extend benefits to legally married same-sex spouses of Federal employees and annuitants on the same basis as to opposite-sex spouses.
In addition, the OPM announced that the children of same-sex marriages will be treated in the same manner as those of opposite-sex marriages and will be eligible family members according to the same eligibility guidelines.
The OPM announcement emphasized that legally married same-sex couples would be recognized as married regardless of whether their state of residence recognized their marriages. However, the OPM would not recognize domestic partnerships or civil unions.
On August 14, 2013, the Pentagon announced that, in response to the Supreme Court decision that overturned the Defense of Marriage Act, it was moving expeditiously to extend federal benefits to same-sex spouses of military personnel and civilian defense employees. The benefits will be available to all legally married spouses regardless of sexual orientation beginning no later than September 3.
In addition, the Pentagon said that it would grant leave for couples who are not stationed near jurisdictions that recognize same-sex marriage so that they can travel to those jurisdictions to be married.
Moreover, same-sex spouses will be eligible for military health benefits and housing allowances on a retroactive basis if they were legally married before the June 26 Supreme Court decision. Entitlements will begin at the date of marriage for those who wed after the ruling.
In an announcement on August 30, 2013, the Internal Revenue Service said that the federal government will recognize the marriages of same-sex couples even if the couples live in a state that does not recognize same-sex marriage.
The IRS said that it would use a "place of celebration" rule in recognizing same-sex unions. That is, the U.S. government recognizes a marriage if the union was legally recognized in the place where it occurred, where it was "celebrated," even if the married couple lives in a state where gay marriage is prohibited.
Moreover, the IRS ruling is retroactive. Generally, the statute of limitations for filing a refund claim is three years from the date the return was filed or two years from the date the tax was paid, whichever is later. As a result, legally married same-sex couples may file amended claims for tax years 2010, 2011, and 2012.
Also on August 30, the Department of Health and Human Services announced that legally wedded same-sex couples, wherever they live, are eligible for certain Medicare benefits reserved for married couples.
In a memo, the department said, "Today, Medicare is ensuring that all beneficiaries will have equal access to coverage in a nursing home where their spouse lives, regardless of their sexual orientation. Prior to this, a beneficiary in a same-sex marriage enrolled in a Medicare Advantage plan did not have equal access to such coverage and, as a result, could have faced time away from his or her spouse or higher costs because of the way that marriage was defined for this purpose."
In a pair of decisions handed down on August 29, 2013, federal district court Judge Consuelo B. Marshall ruled in Cooper-Harris v. USA, a case filed by a lesbian couple denied benefits from the Veterans Administration, that the district court has authority to hear a constitutional challenge to statutes defining marriage as opposite-sex only for purposes of military benefits, and that sections of the statute, Title 38, are unconstitutional under equal protection principles.
Judge Marshall ruled that the statute is unconstitutional even under the lenient "rational basis" standard. She pointed out that "the exclusion of spouses in same-sex marriages from veterans' benefits is not rationally related to the goal of gender equality," which was the purpose of Title 38. She also held that the "denial of benefits" to these spouses is not rationally related to "ensuring that servicemembers perform to their 'maximum potential,'" or other purposes, "including readiness, recruiting, cohesion, and retention" or to the "military's commitment to caring for and providing for veteran families."
While it is unclear whether a district judge can declare a statute unconstitutional nationwide, the ruling should be sufficient to allow the Veterans Administration to extend benefits to same-sex married couples on the same basis as it does to opposite-sex couples.
These rulings, especially the extension of federal benefits regardless of the state of residence, will materially affect married same-sex couples and should contribute to the practice of couples who live in states that prohibit same-sex marriage to travel to the more welcoming states in order to marry.
However, the Social Security Administration uses a place of residence rule rather than the "place of celebration" rule to determine eligibility for spousal benefits. Under this rule, it has denied claims from same-sex couples living in states where their marriages are not recognized.
The ramifications of the IRS ruling is discussed in the clip below.