Federal Marriage Benefits Available to Same-Sex Couples

Same-sex married couples may now qualify for federal benefits that were previously only available to heterosexual married couples.

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The DOMA Decision Allows Same-Sex Married Couples to Receive Benefits

On June 26, 2013, the U.S. Supreme Court issued its decision in United States v. Windsor and struck down the section of DOMA (federal Defense of Marriage Act) that defined marriage as a "union between a man and a woman." The case involved Edith Windsor and Thea Spyer, who married in Canada in 2007 after being in a relationship for 40 years. When Spyer died in 2009, Windsor was forced to pay $363,053 in federal taxes on Spyer’s estate, which she would not have had to pay if she’d been Spyer’s husband. She argued that DOMA, which prevented her from being considered Spyer’s spouse for federal purposes, cost her $363,053.

In a 5-4 decision, with the majority opinion written by Justice Anthony Kennedy, the Supreme Court ruled that the section of DOMA defining marriage as between a man and a woman violates the Equal Protection Clause and is therefore unconstitutional.

If you are in a valid same-sex marriage, you are now entitled to federal benefits under the Windsor decision. However, the rules for eligibility will vary by federal agency.

Place of Celebration or the "Married is Married" Rule

Many federal agencies, such as the U.S. Citizenship and Immigration Services (USCIS) and the U.S. Office of Personnel & Management look to the place of celebration (where the marriage was performed) to determine whether same-sex married couples are eligible for benefits. If you're in a valid marriage, you will qualify for immigration status and federal employee benefits (if either of you works for the federal government), even if you live in a non-recognition state. 

The same goes for the IRS and eligibility for federal tax benefits. In August 2013, the U.S. Department of Treasury ruled that all same-sex couples that are legally married in any U.S. state, the District of Columbia, a U.S. territory or a foreign country will be recognized as married under all federal tax provisions where marriage is a factor.

The Treasury Department further clarified that federal recognition for tax purposes applies whether a same-sex married couple lives in a jurisdiction that recognizes same-sex marriage (such as California) or a non-recognition jurisdiction (such as Texas). But the decision does not apply to same-sex couples in domestic partnerships or civil unions.

Place of Domicile Rule

However, some federal agencies, such as the Social Security Administration, only recognize marriages that are valid in the place of domicile (where the couple lives) for the purposes of granting federal benefits. This means if you're in a same-sex marriage, but you live in a non-recognition state, you aren't eligible for Social Security benefits on your spouse's work record. If you live in one of the 17 jurisdictions that recognize same-sex marriage, you will qualify for benefits. This rule also applies to Medicaid and Supplemental Security Income, Medicare, Bankruptcy filings, and benefits under the Family Medical Leave Act.

If you are in a domestic partnership or civil union in any of the states that offer those relationship options, none of the benefits of marriage under federal law will apply to you, because the federal government does not recognize these same-sex relationships.

What Benefits Do Same-Sex Married Couples Qualify for Now?

There are over one thousand federal laws in which marriage status is a factor. These laws confer rights, protections, and benefits to married couples -- from Social Security survivor benefits to federal tax benefits to federal employee health and retirement benefits.

Here are some of the federal benefits that same-sex married couples may now receive (subject to the specific federal agency's rule for determining eligibility).

Social Security Benefits

Married couples get a big financial boost from certain Social Security benefit programs that have not historically applied to same-sex couples.

Spousal survivor benefit. A surviving spouse of a worker entitled to Social Security retirement or disability benefits may be entitled to receive retirement benefits based on the deceased spouse's earning record.

Spousal retirement benefit. For retired married couples, a person whose calculated Social Security benefit is lower than that of his or her spouse may take half of his or her spouse's higher benefit, rather than receive the amount calculated from his own earnings.

Lump-sum death benefit. A surviving spouse gets $255 from the federal government to help pay for funeral arrangements.

To learn more about the status of Social Security benefits for same-sex couples, see Nolo's blog post on post-DOMA Social Security benefits.

Tax Benefits

Same-sex married gay and lesbian couples can now take advantage of federal tax benefits. Here are just a few of the benefits they may now receive:

Filing joint income tax returns with the IRS. Filing a joint return may offer advantages over separate returns. Many unmarried couples lose thousands of dollars per year because they have to file separate tax returns with the IRS.

Creating a "family partnership." This federal tax law allows couples to divide business income among family members, again resulting in big tax savings.

Estate Tax and Estate Planning Benefits

There are a myriad of estate planning benefits available to married couples.

Estate and gift tax exemption. Federal law exempts a certain amount of money from federal estate taxes and federal gift taxes for all property left to a surviving spouse (currently the exemption is $5 million). The surviving spouse does not pay taxes on any amount he or she receives from the deceased spouse that's under the exemption limit.

Estate Tax "Portability." Married couples can combine their personal estate tax exemptions. This means that the second spouse to die can leave property worth up to $10 million free from federal estate tax. Unmarried couples do not get the "portability," so that the second partner in a relationship to die can leave only $5 million tax-free.

Life estate trusts. Married couples can create life estate trusts, including QTIP trusts and QDOT trusts, which provide distinct tax advantages upon the death of one spouse. For example, the QTIP trust allows surviving spouses to use trust property tax-free in certain circumstances. The QDOT trust allows a non-U.S. citizen surviving spouses to postpone paying any estate taxes above the exemption amount.

Veteran and Military Benefits

Spouses of deceased veterans are entitled to numerous benefits, including health care, death pensions, educational assistance, home loan guarantees, vocational training, and bereavement counseling.

Spouses of living military personnel may be eligible for health care, family separation pay, and relocation assistance, among many other benefits. For more information, see Nolo's articles on military benefits for same-sex couples and veterans benefits for same-sex couples. Now that DOMA has been overturned, same-sex married spouses should also be entitled to these services and benefits.

Federal Employment Benefits

More than 22 million Americans are employed by the federal government. Many of the employment benefits that the federal government provides to its employees and their families are tied to marital status. These benefits, which are part of the employee's compensation package, are denied to unmarried employees. Examples of a few of these benefits include:

  • health insurance for spouses, and
  • wages, worker's compensation, health insurance, and retirement plan benefits for the surviving spouse of a deceased federal worker.

Immigration Benefits

Many immigration benefits are tied to marital status. For example, a non-U.S. citizen may obtain legal residency, and later citizenship status, when married to a U.S. citizen.

For information on protecting your same-sex relationship under the law, including how to leave property to one another, make health care decisions for each other, and take care of finances, get Nolo's A Legal Guide for Lesbian & Gay Couples, by Denis Clifford, Frederick Hertz, and Emily Doskow.

by: , J.D.

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