NEW YORK (MainStreet) Thanks to the landmark decision to overturn Section 3 of the Defense of Marriage Act, this is the first year that Debra Abbott-Walker will not have to pay $1,500 for her spouse, Jennifer, to have health insurance coverage. That's because the couple will file their federal taxes jointly now that same sex marriage is recognized on a federal level.
The fee Walker paid was the estimated value of the employer's financial contribution towards health insurance coverage for non-dependent same-sex partners.
"I can only get back the $1,500 I paid in previous years if I file an amended tax return," said Abbott-Walker, who lives in Connecticut. "If we hadn't gotten married, I'd still be paying a $1,500 tax for my wife's health insurance coverage but now she's covered without a fee."
Like Walker and her wife, many same sex married couples paid more in federal taxes prior to the decision, because they were required to file as single.
"As the April 15 filing deadline approaches, the most important thing for married same sex couples is filing status," said Robert Fishbein, vice president and corporate counsel with Prudential Financial. "They are required at the federal level to file jointly but at the state level it's an open question because the state still has the right to determine whether they recognize same sex marriage."
For example, New York recognizes gay marriage; however, in states like Pennsylvania and Ohio a same sex couple would have to file separate state tax returns.
"That's part of the uncertainty that's still out there," Fishbein told MainStreet at a Prudential press briefing this week in Manhattan at The National on Lexington Avenue.
In most cases, two income households have more discretionary income than single households, and the protections that are built into marriage become more valuable over time as a couple ages.
"Gay couples now have the same opportunities in terms benefits and some of the same potential burdens that heterosexuals have," said Brad Snyder, director of institutional giving with the Lesbian, Gay Bisexual & Transgender Community Center.
In fact, couples who live in states that recognize same sex unions may be leaving money on the table by delaying marriage, according to the author of a new study.
"With a spouse's employer program, there may indeed be benefits only available to same sex couples who choose to get married," said James Mahaney, vice president of strategic initiatives with Prudential and author of the white paper entitled "Financial Planning Considerations for Same Sex Couples After Windsor."
Windsor refers to United States v. Windsor, the Supreme Court ruling that allowed same sex marriages to be recognized legally at the federal level.
As a result, depending on employer, same-sex married couples can now gain access to spousal health insurance coverage, flexible spending accounts, health reimbursement accounts and health savings account.
Same sex couples who are married also have improved survivor benefits for their retirement accounts.
"From a social security standpoint you need to be married a certain amount of time to qualify for survivor benefits so it's important not to delay marriage for this reason," said Mahaney, who worked with Fishbein on the study.
Couples who are not married long enough at a spouse's time of death, could miss out on survivor benefits.
"Now that we have federal recognition, Jennifer and my children will get a social security benefit whereas before it would just be my children who got a benefit," Walker told Mainstreet.
--Written by Juliette Fairley for MainStreet