We are living a strange moment in the ongoing struggle to win full marriage rights for same-sex couples. We're clearly making progress.
Full marriage, with the same rights and obligations as heterosexual couples, is currently available in five states and the District of Columbia. Some ten or so other states maintain registries of domestic partnerships which give partners various legal rights depending on local laws.
The federal government is barred by the Defense of Marriage Act (1996) from recognizing any of these couples, but President Obama has said the Department of Justice should cease defending DOMA in court. However the Republican House of Representatives has hired its own law firm to defend the law.
Meanwhile, several national polls including one just this week from CNN say majorities now approve of gay marriage. This is a stunning, happy turnabout in the last few years.
What I want to share here are a couple of stories about some of the strange anomalies gay couples encounter because of the legal flux we are living in. Here's a bit of what it is really like to get older as part of an LGBT couple in this betwixt and between time.
A lesbian friend of mine recently reached the magic age of 65 - the moment so many of us anticipate with anxious hope - when Medicare eligibility kicks in. Her partner (they are registered with their city) has good health insurance from an employer so they have both been on that.
Mary visited the Social Security office and was told that yes, she would be put on Medicare Part A, but she didn't need to sign up for Medicare Part B because she could stay on her existing group plan without penalty as long as her younger partner was able to qualify them both. Great - that's settled.
Except then she got a letter saying that she would be penalized for failing to sign up for Medicare Part B. Huh? The clerk had made a mistake, a natural one.
It turns out that because of DOMA, the federal government can't recognize the health insurance she was already getting through a partner whose existence the Feds aren't allowed to notice. It took some work and several months delay to get that fixed and Mary onto Medicare Part B.
Interestingly, AARP has the best explanation I've seen of this wrinkle in the Medicare rules:
A domestic partner - someone who is not formally married to the employee but covered under his or her insurance as a family member — is also entitled to a special enrollment period. But this applies only to domestic partners of the opposite sex, according to the Social Security Administration.
Under the Defense of Marriage Act, same-sex partners — even those who are legally married under the laws of their state or country — do not get the same consideration.
The covered employee can delay Part B and later qualify for a special enrollment period in his or her own right. But his or her partner, though covered as a dependent by the same insurance, is not entitled to a special enrollment period and must therefore sign up for Part B at age 65 to avoid late penalties.
This Medicare wrinkle has nothing on the conundrums related to filing taxes.
Last December, after 32 years together, my partner and I decided we had better get registered with the state of California. Having grown up and grown older without any expectation that the state should be involved in our relationship, we'd never gotten around to this. But the experience of her lying in a trauma center waiting to see if she needed emergency brain surgery after a bicycle accident convinced us that we should reinforce our existing powers of attorney with everything we could find to assure we were treated as connected in any emergency.
So, without any particular romance, we trotted off to a notary public to fill in domestic partnership forms. Yhen we learned that the IRS had made a rule change last year that threw our tax preparations into complete confusion.
We had each always simply filed separate returns, paid up or gotten our refunds and that was that. But the IRS has decided it must take into consideration domestic partnerships in the community property states of California, Washington and Nevada even though domestic partners are still required under DOMA to file individual returns!
So domestic partners must also file joint returns as well even though those joint returns don't count. Or, at least, that's the best I could make of this rule. And better financial and legal minds than I didn't do much better.
I can convey the level of confusion this development caused gay couples by sharing what TurboTax, the tax prep software, advised.
Accurate tax return preparation for couples in this situation relies on the review and analysis of each couple’s individual agreements and related state law, within these new guidelines. Decisions on how to split income and expenses are based on a state’s community property law and the individual legal agreements made between couples at the time of their registered domestic partnership or same sex marriage. Given this, we can’t provide a fully guided federal experience in TurboTax at this time.
At this time, you have 3 options:
Option 1 – Manually prepare your individual federal tax returns in TurboTax by reporting your community income. We recommend this only if you are a couple with income just on W-2s, you don’t itemize deductions, and you are 50/50 partners. You will need to file these individual returns by mail.
Option 2 – Get help preparing your tax returns from a tax professional, especially if you have investments, rentals pensions or a business.
Option 3 – File an extension before April 19, 2011 and deal with this after that date when we expect to have more functionality and guidance built into the TurboTax experience.
That is, even the tax professionals are punting on the complications introduced by this federal decision. A New York Times blog had a good post on the various complications, some of which may end up beneficial to some gay couples, as well as unquestionably to tax preparers.
It turned out we didn't have to figure it out, for this year. In mid-March, while we were researching the rules, we received a notice from the California Secretary of State indicating that though we had submitted the papers in December 2010, they hadn't gotten around to filing our domestic partnership until 2011.
Rescued by official negligence! Our accountant friends assure us that by next year the Feds will have made some sense of the rules. We hope so.
Meanwhile we do get one tax benefit from having made our relationship legal. My health benefits used to be taxed by the state of California as income to her. Now she can deduct them on her California taxes. It's not a huge amount but every little bit helps.
Understand, I'm not really complaining. When gay couples finally do share in the legal structures that govern marriage, our lives will be more secure, just a little bit safer. In the long run. And we want, like most people, to be able to stand before the world and say, "This is the person who I love and we are making our lives together."
And I sure hope we get through this transition period on the way to legal marriage as soon as possible so we can stop dealing with the strange set of extra hoops that gay folks now have to jump through.