wed lesbian taxes
Dear Mama Lo,
My partner and I live in New York and recently got married in Massachusetts. I have two related questions.
1. What status do we use to file our State Taxes? I’m assuming we still use single for the Fed. Can we still file single and separately, as always, for the state or do we have to file as married?
2. I have added my partner to my health benefits. I was told I may have to pay taxes on the value of those benefits that cover her and that I can not use pre-tax dollars in the Health Spending Account I created. How do they know what $$ in my HSA covers her anyway?
Any advice you can give us would be most helpful.
Thank you,
2nd-Class Citizen Paying First-Class Tax
read moreDear Citizen,
Welcome to the twilight zone. Your question caused me to do much research. Rules that cover income taxes, retirement plans, social security, medical plans and other employee and family benefits under a myriad of Federal laws do not recognize same sex marriages. The 1996 Federal defense of marriage act steers the mood of Federal law. State law can be different then Federal law and each state can differ from the other. Federal rules can differ depending if you are in a community property state or not.
New York recognizes most same sex marriages performed elsewhere, but as you know, same sex couples cannot get married in New York. Go figure. So you had to go to Massachusetts to get married and have it recognized in New York.
You are correct that you both have to file as single on your federal income tax returns. This actually may be a tax benefit to you since often there is a “marriage penalty tax” paid when filing a joint return. The benefit or penalty of a joint tax return depends on how much each of you make. New York is a different tax story. As stated, New York recognizes marriages in Massachusetts. So for New York you are married and should file a joint return. Single Federal, Married New York, This means getting good professional tax help when the time comes to fill out your 1040. See comments on Nolo press.As far as your HSA health plan goes, it is also a mixed bag. HSA actually stands for Health Savings Account and no one can use their health savings account to pay for health insurance. HSA plans were designed to pay medical costs in high deductible plans. Where the HSA screws you is that the HSA cannot pay your spouse’s medical costs (unless you want to lose HSA benefits).
As part of the changing same sex landscape, your spouse’s insurance is on your plan, which means your spouse now has insurance. This is beneficial. However, You are out of luck with the tax benefits normally associated when your plan covers your spouse. In fact if you use your employer health insurance for both of you,(as opposed to you paying for the insurance) you get a weird tax result. You have to pay income and payroll taxes on the value of your same sex spouse’s health insurance. That Spousal insurance benefit is added to your W-2 income.
I suggest you go to an attorney who is familiar with same sex marriage issues and make sure that your will, health care proxies, retirement plans and other legal documents are set up to your best advantage. You will not get the benefits that retirement plans and social security give to opposite sex marriages, but make the best of what you can.
Nolo web site seems to be updated for law changes and decisions for same sex couples. These laws are in constant flux. My guess is that the military will lead the way for change in recognition of same sex couples. The military lead the way in ending segregation in the US. Truman desegregated the army after WWII. It took about 20 years for society in general to catch up with the military.
Depending on where you plant your feet on this earth and what jurisdiction you are looking at, your rights, privileges and obligations as a same sex married person will vary. It is like being in a carney fun house and looking at the mirrors. You stand in one spot and look at a mirror and you look short and fat, you turn around and look at another mirror and you look tall and skinny. You are standing in the same spot, just turning around and looking in a different direction (Federal and State) and you have a different configuration. The twilight zone indeed.
I wish you a happy marriage,
Mama Lo
