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How DOMA’s departure could cost gay couples money

(Mario Tama/Getty Images)

United States v. Windsor, the Supreme Court decision striking down Section 3 of the Defense of Marriage Act, was obviously of huge symbolic importance for LGBT Americans, but as we've been stressing this week, it matters in practical terms as well. The most immediate consequence is that Edie Windsor gets her $363,053 in estate tax payments back. But thousands of other same-sex married couples will see their lives change in ways big and small too because of the federal government's recognition of them. Here's how.

Which couples does this affect?

Edie Windsor, the plaintiff in United States v. Windsor, celebrates at the LGBT Center in the West Village. (Richard Drew/Associated Press)

Everyone who has a legally issued marriage license, even if obtained abroad (Windsor married her wife in Toronto).

But let's say I live in a state that doesn't recognize my marriage, like Virginia, but got married in a place where same-sex marriage is legal, like DC. Does anything change for me?

Utah Sen. Jim Dabakis (D) of Salt Lake City proposes to his boyfriend Stephen Justesen. They have been together 25 years. Utah does not recognize their marriage. (Chris Detrick/Associated Press/The Salt Lake Tribune)

Maybe? As this fact sheet issued after the ruling by LGBT rights groups explains, federal laws differ in whether they place priority on the "place of residence" (in this hypothetical, Virginia) or the "place of celebration" (in this case, DC). Immigration law tends to focus on the latter, while the IRS and Social Security focus on the place of residence.

The administration has initiated a regulatory review meant to sort this out, and LGBT rights groups are pushing for the Obama administration to make the "place of celebration" standard the norm, so as to enable couples whose states don't recognize their marriages to be recognized by the federal government.

How does it affect taxes?

The Internal Revenue Service in Washington, D.C. (Bill O'Leary/The Washington Post)

For those same-sex marriages that the federal government does recognize — and again, the IRS uses a "place of residence" standard, so this could be limited to couples in states where same-sex marriage is legal until the Obama administration takes further action — joint filing will be available as an option.

But that's actually probably a bad thing for the couples involved. Same-sex marriages are more likely to be dual-earner, which means they're likelier to see a marriage penalty. A 2004 CBO report predicted that recognizing same-sex marriage would mildly increase revenue for exactly this reason. This effect is exacerbated both for wealthy couples and for the working poor, as the Earned Income Tax Credit often imposes a big marriage penalty.

The decision is unquestionably a good thing for couples on the estate tax front, as Edie Windsor's case demonstrates. There's an unlimited exemption to the tax for money left to spouses, an exemption that covered same-sex couples can now claim.

What about Social Security?

President Franklin D. Roosevelt signs the Social Security Act  on Aug. 14, 1935. (AP)

This is another area where "place of residence" is the standard, albeit one Obama can change. So no dice if you got married in Iowa and then moved to Nebraska. The spouses of Social Security retirement insurance and disability insurance recipients can receive a benefit worth half their spouse's benefit, but have to forgo benefits they themselves received if they're less than the spousal benefit amount.

Surviving spouses can also receive their late spouse's Social Security benefits if they exceed their own benefits. Additionally, a lump sum payment of $255 can be paid to surviving spouses under some conditions. Being married also makes it harder to qualify for Supplemental Security Income, a Social Security program for impoverished elderly or disabled people.

The Supreme Court's decision made all these benefits available to same-sex married couples. What's more, according to LGBT rights groups, those in civil unions or domestic partnerships (such as those that exist in Oregon or Colorado) are also eligible, since they have the same inheritance rights as married couples.

And health care?

President Lyndon Johnson signs Medicare into law and makes former president Harry Truman, right, the first enrollee. (AP)

Medicare part B — which pays for outpatient services like doctor's appointments — and part D, which covers prescription drugs, won't be affected much. Everyone 65 or older is required to enroll in the former, and is eligible for the latter, under most conditions. It may affect premiums (in either direction) and may make one eligible to waive a late-enrollment penalty for not joining the programs on time.

Depending on one's work history, eligibility for Medicare part A — which covers inpatient care, some nursing facilities, hospice care, and the like — may be contingent on being legally married to an eligible person. Medicare uses a "place of residence" rule, so couples in states that recognize same-sex marriages may have an easier time getting an otherwise ineligible spouse onto Medicare part A.

The other big health care program affected is Medicaid, and like SSI, being married generally serves to make one less likely to qualify under the program's income restrictions. The biggest challenge for same-sex couples with Medicaid is that being in the program may require one to name the biological father of their children, which could be an issue for lesbian couples who used an anonymous sperm donor to conceive.

Unemployed same-sex couples on COBRA will benefit, since spouses are allowed to stay on health plans if an employee loses their job and opts to continue paying for their coverage through COBRA. Additionally, insurance costs for spouses will no longer be taxable income, as they are for legally unrecognized same-sex couples currently.

Finally, as Sarah explained here, eligibility for Obamacare premium subsidies may be affected, with married gay couples with very different incomes becoming likelier to qualify for support, and those with similar incomes becoming less likely to qualify.

What about welfare?

President Bill Clinton promotes welfare reform. (The Washington Post)

Temporary Assistance for Needy Families (TANF), or "welfare," doesn't vary benefits based on marriage, but it does based on whether both parents are legally recognized, which obviously interacts with marriage law. It's easier for members of married couples to be recognized as legally parents than it is for unmarried couples. That could affect eligibility and also whether or not one's eligible for child care assistance, or required to enroll in "welfare to work" programs, depending on their state of residence.

Additionaly, TANF, like Medicaid, may require couples to name the biological father of their children, even if it's an anonymous sperm donor.

What if I declare bankruptcy?

Phoenix's latest album, "Bankrupt!" (Atlantic Records)

Same-sex couples now have the ability to file for bankruptcy jointly, which can be advantageous in some cases. Additionally, your spouse's assets will now count in determining if you can file for Chapter 7 bankruptcy, even if you file separately. If you get divorced, alimony and other payments to your spouse will take precedence, which wouldn't have happened if your marriage hadn't been recognized. Which marriages the federal government will recognize is unclear; whether a "place of residence" or "place of celebration" standard applies has yet to be sorted out.

And financial aid?

This kid gets it. (Butch Dill/AP)

Financial information about your same-sex spouse now matters for your Free Application for Federal Student Aid (FAFSA), used to determine eligibility for Pell Grants, Stafford and PLUS loans, and more. If your spouse has a lot of income or assets, that could be bad for you. Additionally, the recognition of same-sex marriages means that it's more likely that same-sex parents will both be legally recognized as parents for the purposes of financial aid. So if your dad's husband hasn't legally adopted you, and you were thus eligible for financial aid despite him being super-rich, you won't have that benefit any longer.

Let's say I'm a federal employee with a same-sex spouse. Does this change anything for me?

President Obama greets Alison Nathan, left, a former associate counsel who is now a federal judge in New York, her partner Meg Satterthwaite, and their twin sons Oliver and Nathan. (Peter Souza/White House)

So many things! As my colleague Joe Davidson explained last week, "Federal employees living in the 12 states and the District where same-sex marriages are legal would get full spousal benefits immediately if DOMA is overturned." That means health care, dental, vision — the works. It's less clear what it means for those with legal marriages that aren't recognized in the state where they live. That'll depend on whether a "state of celebration" or "state of residence" standard is used, and it isn't clear which one would prevail at first, before the administration's review takes effect. Additionally, it will be illegal to threaten you, as you're the spouse of a federal employee.

And if I'm a private employee?

Private employees (Jeffrey MacMillan for Washington Post)

In addition to no longer having health benefits taxed, and being eligible for COBRA, you'll also be guaranteed survivor benefits from your spouse's pension if the federal government recognizes your marriage. In addition, your spouse will be able to take out retirement savings to pay for your medical bills or tuition. However, these benefits are the result of regulations that follow the "place of residence" rule, so your state has to recognize your marriage too, at least for the time being.

What about if I'm in the military, or a veteran?

Navy Lt. Gary Ross, right, and Dan Swezy exchange wedding vows on Sept. 20, 2011, in Duxbury, Vt. The two men recited their vows moments after the repeal of the military's "don't ask, don't tell" policy. (Toby Talbot/AP)

Military spouses get health benefits, housing help, and all manner of other support, and because the military recognizes marriages based on where they were performed, same-sex marriages will be recognized similarly. It's a little trickier for veteran's benefits, like VA health care and GI Bill assistance with higher education costs. If you live in a state that recognizes your marriage, you're good, and if you lived in such a state at the time of your marriage, you're good, but if you traveled for the purpose of getting married, you likely won't get benefits.

If my same-sex spouse lives abroad, and I'm a U.S. citizen, can they get a green card now?

Fabiola Morales, left, a Peruvian citizen, was threatened with separation from her wife, Kelly Costello, because the federal government didn't recognize their marriage. (Maria Vicencio Photography)

Yes! Immigration law follows the "place of celebration" standard, so you'll almost certainly get to make your spouse a permanent resident.

Let's say my same-sex spouse falls ill. Can I take leave time to care for them?


Yes! The Family and Medical Leave Act provides for employees to take leave to care for spouses, and has additional protections for spouses of service members and veterans. However, it currently uses a "state of residence" standard, so same-sex couples whose marriages aren't recognized by their states are out of luck.

If I want to run for office, can I use my same-sex spouse's money?

Rep. Jared Polis and his partner, Marlon Reis, in 2008. (Ed Andrieski/AP)

Yep! The law firm Caplin & Drysdale explains here. However, federal campaign matching funds for presidential candidates impose restrictions on how much of your own money you can use, and your spouse's money will now count for that.

Anything else?

Good luck getting farm subsidies, gay couples. (Sarah L. Voisin/The Washington Post)

Josh Barro at Business Insider has a list of even more ways this affects couples. Same-sex couples can no longer be discriminated against for their marital status in employment or public housing. Their marriages count for conflict-of-interest statutes, so you probably can't work for a federal contractor who your same-sex spouse in the federal government is sending contracts to anymore. Nor can you strike if you work for your same-sex spouse.

Eligibility for housing programs now takes same-sex spouse's financial status into account, which could make some LGBT people ineligible. Same goes for farm subsidies, which are limited to a certain amount per "person," with married couples counted as one "person." If you sell your land to the government for a park or something, not only are you guaranteed to be allowed to stay there, but if your same-sex marriage is recognized, your spouse is too.

There are all kinds of other areas of the law are affected too, from non-Native  spouses of Native Americans' claims to tribal property, to specialized benefits for railroad workers, and public safety officers. In 2004, the GAO estimated that 1,138 benefits, rights, and privileges at the federal level are dependent on marital status. Those all apply to same-sex couples who the federal government recognizes now.



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Brad Plumer · June 29, 2013

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