On June 26, 2013, the Supreme Court issued its opinion in United States v. Windsor, in which it reviewed, and ultimately struck down, Section 3 of DOMA. Section 3 of DOMA stated:
”In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word ‘marriage’ means only a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.”
The meaning of the Supreme Court’s ruling is now the federal government must treat legally married same-sex couples the same way they treat legally married opposite-sex couples.
Since the Windsor decision was issued, all the different federal departments and agencies, including the IRS, Social Security Administration, Veterans Affairs, and Medicare, have been scrambling to update their regulations so that legally married same-sex couples have the same rights and benefits of legally married opposite-sex couples. The new regulations are continuing to develop and evolve, but certain things are now clear.
First, legally married same-sex couples may now file their federal taxes under a “married” status, and enjoy the tax benefits all married couples enjoy, including claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA, and claiming the earned income tax credit or child tax credit. These benefits will also extend to gift and estate tax benefits. Additionally, legally married same-sex couples may amend their past tax returns, in accordance with IRS regulations, to file under a married status.
Also, legally married same-sex couples will be able to take advantage of the Social Security retirement spousal benefit. This benefit is a benefit for a non-earning or lower-earning spouse that allows him or her to collect an amount that is equal to half of the other spouse’s Social Security benefit. People are only eligible for a spousal benefit when their own benefit is less than half of their retired spouse’s benefit, or when they seek to delay their own application for Social Security benefits based on their own work record.
Additionally, spouses of federal employees will now be eligible to participate in the employee’s health plan, and other federal employee benefits.
Another practical reality of these evolving federal regulations, is divorcing same-sex couples will also have these benefits. Divorcing couples can now take advantage of tax benefits in property distribution, including division of pensions pursuant to Qualified Domestic Relation Orders (or QDROs), which was not previously available to them. If a divorcing spouse is a federal employee, the other spouse may remain on the employee’s health and other benefits.
Divorced spouses will also receive benefits through Social Security. This will apply to divorced spouses, who were married for at least 10 years prior to divorce. Any widow or widower of a deceased spouse is entitled to receive that deceased spouse’s basic Social Security benefit amount when the widow or widower reaches full retirement age. Thus, if a couple is married 10 years or more, and then one spouse dies, the surviving spouse will be entitled to receive the deceased spouse’s full social security benefits, as long as the surviving spouse never remarried.