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U.S. gov’t to recognize same-sex marriages for tax purposes

Even legally wed couples in non-marriage equality states will be eligible for tax benefits

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Jeff Zarillo, Paul Katami, Sandy Stier, Kris Perry, David Boies, Chad Griffin, gay marriage, same-sex marriage, marriage equality, Proposition 8, Defense of Marriage Act, DOMA, Prop 8, California, Supreme Court, gay news, Washington Blade
Jeff Zarillo, Paul Katami, Sandy Stier, Kris Perry, David Boies, Chad Griffin, gay marriage, same-sex marriage, marriage equality, Proposition 8, Defense of Marriage Act, DOMA, Prop 8, California, Supreme Court, gay news, Washington Blade

The U.S. government will treat married same-sex couples as equal in the aftermath of the court ruling against DOMA (Washington Blade photo by Michael Key).

The legal same-sex marriages of gay couples — whether or not they reside in a state that observes their union — will now be recognized for tax purposes in the wake of the Supreme Court decision against the Defense of Marriage Act.

Treasury Secretary Jacob Lew announced the change on Thursday in a joint statement with the Internal Revenue Service.

“Today’s ruling provides certainty and clear, coherent tax filing guidance for all legally married same-sex couples nationwide,” Lew said. “It provides access to benefits, responsibilities and protections under federal tax law that all Americans deserve. This ruling also assures legally married same-sex couples that they can move freely throughout the country knowing that their federal filing status will not change.”

The decision, which brings the Obama administration into compliance with the ruling against DOMA, means gay married couples will be able to file federal taxes jointly each year. The announcement also means married gay couples be treated the same as opposite-sex married couples for income and gift and estate taxes.

These couples, according to the joint statement, will now be treated equally in terms of claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

LGBT advocates applauded the Obama administration for instituting the change, which they said would help bring relief to married gay couples throughout the country.

Evan Wolfson, president of Freedom to Marry, said the announcement makes today “a day of celebration and relief for married same-sex couples all over America.”

“At long last, the IRS will treat them as what they are: married,” Wolfson said. “Freedom to Marry commends the administration’s swift implementation of the Supreme Court’s landmark ruling for federal equality in an area that will have a direct, tangible impact on families’ financial health.”

Chad Griffin, president of the Human Rights Campaign, also praised the Obama administration for implementing the change.

“With today’s ruling, committed and loving gay and lesbian married couples will now be treated equally under our nation’s federal tax laws, regardless of what state they call home,” Griffin said.  “These families finally have access to crucial tax benefits and protections previously denied to them under the discriminatory Defense of Marriage Act.”

The issue of unequal federal taxation for gay married couples was the reason why the Supreme Court struck down Section 3 of DOMA. Plaintiff Edith Windsor, a New York lesbian, sued the U.S. government because she had to pay $363,000 in estate taxes upon the death of her spouse, Thea Spyer.

According to the statement, the federal government will now recognize for tax purposes any legal same-sex marriage — even if the couples resides in a state that doesn’t observe the union. However, the new policy doesn’t apply to domestic partnership or civil unions.

Troy Stevenson, executive director of the New Jersey-based Garden State Equality, said the decisions demonstrates why his state needs to enact marriage equality. New Jersey offers civil unions, but not same-sex marriage.

“While this is great news for couples who have been married in the 13 states that recognize full marriage equality; let us be clear, New Jerseyans should not be required to cross state lines to be afforded the dignity of marriage,” Stevenson said. “This decision by the IRS makes it crystal clear that civil unions are not now, and never will be equal to marriage.”

Additionally, gay couples may file an amended return if they feel they would’ve receive a refund in one or more prior tax years still open under the statute of limitations. That means these couples generally can file a refund claim for up to three years in the past: 2010, 2011, and 2012. Under some circumstances, such as signing an agreement with the IRS to keep the statute of limitations open, they may be able to seek a refund from an earlier time.

Further, gay employees who receive same-sex spouse health insurance coverage from their employers on an after-tax basis may treat the amounts paid for that coverage as pre-tax and excludable from income.

Pending legislation in the Senate that would have eliminated the federal tax on employer-provided health insurance for same-sex couples is known as the Tax Parity for Health Plan Beneficiaries Act.

Sen. Charles Schumer (D-N.Y.), the sponsor of the bill, said in a statement to the Washington Blade he welcomes the new policy from the administration, but still seeks passage of his bill cover individuals in civil unions or domestic partnerships.

“Today’s ruling is an important part of implementing the Supreme Court’s historic decision to overturn DOMA,” Schumer said. “I still strongly believe that couples in civil unions and domestic partnerships should receive the same tax treatment as all married couples and will continue to push for exactly that.”

Senior Treasury officials lay out new policy

In a conference call with reporters, senior Treasury officials, speaking on condition of anonymity, laid out the reasoning by which the administration determined that married gay couples living in non-marriage equality states would be recognized for federal tax purposes.

“We have a federal tax code that applies to all 50 states,” officials said. “The thought process was that from tax administration standpoint, it made sense to have rules to apply across the entire nation. So, same-sex couples that are married under federal law in one state should get similar treatment regardless of where they live. On the flip side, from the administration’s standpoint, it would be very difficult to administer a situation it was dependent on where a taxpayer lived on what the state was in that time.”

Officials said the reasoning was analogous to the administration’s previous determination that common law marriages, or some kind of irregular marriage, would be recognized as a union for federal tax purposes.

It’s possible that under some circumstances, married gay couples will have to pay more in taxes than they were paying with DOMA in place. Officials didn’t have an exact number for how many gay couples would pay more in taxes, but expected it would be proportionate to the number of straight couples.

While gay couples may file an amended tax return for up to three years in the past, officials said there’s no obligation to do so — even if they should have had to pay more in taxes under the new policy.

“It’s basically the taxpayers option to that, to go back and file an amended return,” officials said. “There are instances in which a taxpayer would find it advantageous to file an amended return claiming a joint filing status for a previous tax year, but it’s not a requirement.”

In the event that an employer offers domestic partner health benefits to gay employees, but doesn’t recognize same-sex marriage, officials said federal tax immunity would also apply to these benefits. That would be a situation to similar to Walmart, which is set next year to offer domestic partner health benefits to gay employees in same-sex relationships, but won’t recognize same-sex marriages.

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Politics

HRC slams White House over position opposing gender affirming surgeries for minors

‘Biden administration is flat wrong on this’

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Human Rights Campaign President Kelley Robinson (Washington Blade photo by Michael Key)

Human Rights Campaign President Kelley Robinson issued a strong rebuke on Tuesday of the Biden-Harris administration’s position opposing gender affirming surgeries for minors.

The New York Times reported on June 28 that the White House, which broadly supports making medical interventions available for transgender youth, had expressed opposition to surgeries for patients under 18, having previously declined to take a specific position on the question.

“Health care decisions for young people belong between a patient, their family, and their health care provider. Trans youth are no exception,” Robinson responded. 

“The Biden administration is flat wrong on this. It’s wrong on the science and wrong on the substance. It’s also inconsistent with other steps the administration has taken to support transgender youth. The Biden administration, and every elected official, need to leave these decisions to families, doctors and patients—where they belong,” she added. “Although transgender young people make up an extremely small percentage of youth in this country, the care they receive is based on decades of clinical research and is backed by every major medical association in the U.S. representing over 1.3 million doctors.”

Robinson said the “administration has committed to fight any ban on healthcare for transgender youth and must continue this without hesitation—the entire community is watching.” 

“No parent should ever be put in the position where they and their doctor agree on one course of action, supported by the overwhelming majority of medical experts, but the government forbids it,” she added.

HRC is a prominent backer of Biden’s 2024 reelection campaign, having pledged $15 million to support efforts in six battleground states. The organization has a strong relationship with the White House, with the president and first lady headlining last year’s National Dinner.

A White House spokesperson declined to respond to Robinson’s statement.

Campaign for Southern Equality President Allison Scott also issued a statement.

“This is a cowardly statement from an administration that promised to support transgender people. It is a troubling concession to the right-wing assault on transgender Americans, falling for their false narratives about surgical care and betraying a commitment to equality and trust in the medical community,” said Scott.

“Let’s be very, very clear: Government has no business inserting itself into private medical decisions that should be exclusively between patients, their providers, and the patients’ parent or guardian,” Scott added.

“It is dangerous to begin endorsing categorical bans or limits on healthcare, and there is no justification for restricting transgender youth’s access to the very same care that many cisgender youth receive every year — that’s literally the definition of discrimination,” Scott concluded. “We demand the Biden administration retract this thoughtless statement and work to undo its damage.” 

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Congress

Members of Congress introduce resolution to condemn Uganda’s Anti-Homosexuality Act

U.S. Reps. Mark Takano (D-Calif.) and Joyce Beatty spearheaded condemnation

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U.S. Rep. Mark Takano (D-Calif.) (Washington Blade photo by Michael Key)

More than 20 members of Congress on Thursday introduced a resolution that condemns Uganda’s Anti-Homosexuality Act.

Gay California Congressman Mark Takano and U.S. Rep. Joyce Beatty (D-Ohio) spearheaded the resolution that U.S. Reps. Becca Balint (D-Vt.), Lloyd Doggett (D-Texas), Adriano Espaillat (D-N.Y.), Robert Garcia (D-Calif.), Sylvia Garcia (D-Texas), Josh Gottheimer (D-N.J.), Raúl Grijalva (D-Ariz.), Pramila Jayapal (D-Wash.), Hank Johnson (D-Ga.), Gwen Moore (D-Wis.), Seth Moulton (D-Mass.), Jerry Nadler (D-N.Y.), Eleanor Holmes Norton (D-D.C.), Mark Pocan (D-Wash.), Delia Ramirez (D-Ill), Linda Sánchez (D-Calif.), Jan Schakowsky (D-Ill.), Brad Sherman (D-Calif.), Rashida Tlaib (D-Mich.), Ritchie Torres (D-N.Y.), and Debbie Wasserman Schultz (D-Fla.) co-sponsored.

“The House of Representatives condemns the government of Uganda’s criminalization and draconian punishments regarding consensual same-sex sexual conduct and so-called ‘’promotion of homosexuality,’” reads the resolution.

The resolution, among other things, also calls upon the Ugandan government to repeal the law.

“It is difficult to overstate the gross inhumanity of Uganda’s Anti-Homosexuality Act,” said Takano in a press release.

President Yoweri Museveni in May 2023 signed the law, which contains a death penalty provision for “aggravated homosexuality.”

The U.S. subsequently imposed visa restrictions on Ugandan officials and removed the country from a program that allows sub-Saharan African countries to trade duty-free with the U.S. The World Bank Group also announced the suspension of new loans to Uganda.

The Ugandan Constitutional Court in April refused to “nullify the Anti-Homosexuality Act in its totality.” A group of Ugandan LGBTQ activists appealed the ruling.

“Instead of focusing on rooting out corruption or ending extrajudicial killings, the Ugandan Parliament, president, and Constitutional Court have chosen to mark LGBTQ+ Ugandans as less than human,” said Takano. “Congress must not be silent in the face of such systematic, state-sponsored discrimination.”

“To all those LGBTQ+ people and your allies in Uganda — we see you,” added the California Democrat. “We and the Biden administration will not allow this terrible violation of basic dignity to go unchallenged.” 

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Politics

LGBTQ issues absent from Trump-Biden debate

Advocacy groups hoped candidates would address queer topics

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Former President Donald Trump and President Joe Biden debate on CNN on Jun 27, 2024. (Screen captures via CNN)

At their televised debate in Atlanta on June 27, President Joe Biden and former President Donald Trump traded barbs on issues from abortion and election integrity to immigration and foreign policy. The 81 and 78-year-old candidates even argued over who is a better golfer.

Absent from the discussion, however, were matters of LGBTQ rights that have animated national politics in this election cycle with the presumptive Republican nominee promising to weaponize the federal government against queer and trans Americans as the president pledges to build on his record of expanding their freedoms and protections.

CNN hosted Thursday’s debate, with the network’s anchors Dana Bash and Jake Tapper moderating. ABC News will run the second debate scheduled for September 10.

The president’s performance was widely criticized as halting and shaky, with White House reporter Peter Baker of The New York Times writing that Democratic Party leaders are calling for him to be replaced at the top of the ticket.

Also setting the tone early into the program was Trump’s repetition of the lie that Democrats are so “radical” on matters of abortion that they “will take the life of a child in the eighth month, the ninth month, and even after birth.”

Biden, meanwhile, laid the blame at his opponent’s feet for appointing three U.S. Supreme Court justices during his term in office who overturned Roe v. Wade’s 51-year-old constitutional protections for abortion.

He also referenced the fallout from that ruling and the extreme restrictions passed by conservative legislators in its wake, arguing that Trump would not veto a federal abortion ban if Republican majorities in Congress were to pass one.

Trump also repeated falsehoods about the 2020 presidential election.

“Will you pledge tonight that once all legal challenges have been exhausted, that you will accept the results of this election,” Bash asked him, “regardless of who wins, and you will say right now that political violence in any form is unacceptable?”

The Republican frontrunner first responded by denying he was responsible for his supporters’ violent ransacking of the U.S. Capitol Building on Jan. 6 2021.

After the CNN anchor pressed him twice to answer the first part of her question, Trump said, “if it’s a fair and legal and good election, absolutely” but “the fraud and everything else was ridiculous.”

“You appealed and appealed to courts all across the country,” Biden responded. “Not one single court in America said any of your claims had any merit, state or local, none. But you continue to provoke this lie about somehow, there’s all this misrepresentation, all this stealing — there is no evidence of that at all.”

The president continued, “And I tell you what, I doubt whether you’ll accept it, because you’re such a whiner.”

Advocacy groups hoped the debate would address LGBTQ issues

Leading up to the debate, advocacy groups urged the candidates to defend their records on and policy proposals concerning LGBTQ rights, with some arguing the discussion would advantage President Joe Biden’s campaign, as reported by The Hill’s Brooke Migdon.

As the community celebrated Pride this month, the Biden-Harris 2024 team made significant investments in paid media and the Out for Biden national organizing effort to court LGBTQ voters, who are expected to comprise a larger share of the electorate than ever before.

“This will be an enormous slight to our community if LGBTQ questions are not asked during this debate,” GLAAD President Sarah Kate Ellis said. “Our community is deeply affected by where these candidates stand.” 

“The safety and freedom of LGBTQ people depends on your engagement with the candidates and ability to inform voters about their records and proposals,” she said.

Annise Parker, the outgoing president and CEO of the LGBTQ+ Victory Fund, said “I certainly hope that the moderators bring up the LGBTQ community and LGBTQ issues, because there is a stark contrast between the two candidates.”

“I hope we see a substantive conversation on the records of these two men for the fight for a more equal society,” said Brandon Wolf, national press secretary at the Human Rights Campaign.

“A vast majority of people in this country support an America that treats people with dignity and respect; they support an America that prevents people from experiencing discrimination and harm simply because of who they are,” he said.

“That is where the American people largely are, and I hope we get an opportunity on that stage to see the contrast between these two candidates.” 

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