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For gay couples, first comes the wedding and then a chat with your accountant

Editor’s Note: Now that the Supreme Court has ruled that gay marriage is a constitutional right, gay couples can expect some key changes to their personal finances.

Before this decision, being gay and living in a state where same-sex marriage was illegal meant not being to able to get an employers’ spousal health insurance, Social Security spousal benefits or tax breaks awarded to married couples. Over a lifetime, that could mean a loss of as much as $500,000.

Economics correspondent Paul Solman spoke with accountant and lawyer Janis Cowhey, who is also co-leader of Marcum LLP’s Modern Family and LGBT Practice Group, about changes for gay couples in taxes and employment and Social Security benefits.

Watch last Thursday’s Making Sen$e segment for more on the subject. The following text has been edited and condensed for clarity and length.

Kristen Doerer, Making Sen$e Editor


Janis Cowhey: We have a wedding industry that’s about to boom, because now same-sex couples can get married in all 50 states. So there will be weddings, there will be honeymoons, there will be planning. There’s a whole new wedding industry that will grow around this. It will be a boost for the economy.

Are you married? Are you getting married? You will need to talk to your accountants about your tax planning and possibly amend past tax returns. You will need to speak to your lawyer about what your estate planning documents look like and what you want them to look like. There’s a lot to think about.

Paul Solman: What will happen to employer benefits?

Janis Cowhey: Many companies right now offer domestic partner benefits. Will those continue? I don’t know, but each company will be reviewing their policy. A lot of companies that offered domestic partner benefits for same-sex couples are now taking the position that because you now have the right to get married, you need to get married to get these benefits. Check with your company to understand what they allow. You’ll need to give your company your marriage certificate, so they will give you some of the benefits you’re entitled to — maybe life insurance, dental, or vision.

Paul Solman: How will taxes change for newly married gay couples?

Janis Cowhey: From a tax perspective, the main thing same-sex couples will see is a simplification of their tax compliance. No longer will they need to worry about filing differently at the federal level as opposed to the state level, or filing as married at the federal level and single at the state level. Even if you were living in a state — say, New York — that recognized your marriage, you could have had income from one of those 13 states that didn’t recognize your marriage. And it was very inefficient and expensive to do your tax returns. You need to do your due diligence. Look at your W-2’s. For a lot of unmarried couples, if they include their partner on their health insurance, that’s included back on their income. Not every employer has kept up with that. So there are still a lot of people who are paying income taxes on their spouse’s health insurance that shouldn’t be.

When looking at deductions, you now get to look at the family as a whole as opposed to who paid the real-estate bill or who paid the mortgage interest. You still need to be cognizant of what’s being included as income on your W-2. Is your legally married spouse’s income or your spouse’s health insurance still included in your income? It should no longer be under any circumstances.

Paul Solman: OK, so how about Social Security? What will happen there?

Janis Cowhey: Even though the federal government said two years ago in United States v. Windsor that same-sex couples are recognized at the federal level, there were still some agencies — Social Security is one of them — that, administratively, their guidelines could not recognize some same-sex couples. It was based on where you lived. Even if you were legally married, if you did not live in a state that recognized your marriage, you could not apply for Social Security on your spouse’s record.

Before, we had to plan, and you had to make sure you applied for Social Security while you lived in a state that recognized your marriage. June’s Supreme Court decision will open the door. Every married couple will be entitled to apply for their spouse’s Social Security. If your spouse has passed away and you would bring home more on a monthly basis on their record than on yours, you can now do that.

Paul Solman: Is there anything else you would advise same-sex couples to do?

Janis Cowhey: One important thing for same-sex couples is to carry their documents on a flash drive. It’s what I’ve been recommending to my clients for many years whether they’re married or not, because if there’s a situation where someone is hurt or in the hospital, you’re not always recognized as the next of kin. So carry your living will, your healthcare proxy and your power of attorney on a flash drive, and you’ll never have to worry about that.

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