Everyone knows about the emotional benefits of having the Supreme Court recognize the dignity of same-sex marriages, but there are big financial implications as well. Here are some of the impacts that the ruling will have on you and your spouse’s checkbook.
Income tax. Same-sex couples can now file joint federal tax returns. If one spouse earns a lot more than the other, that will mean some big dollar savings because combining incomes will put the couple in a much lower bracket. One study put the potential savings for couples at $8,000 or more per year.
Health insurance. If you carry your spouse on the health insurance you get from your employer, you will no longer have to pay a tax on the premium. That could mean hundreds of dollars in savings a year. On the flip side, don’t be surprised if companies start phasing out domestic partnership benefits in states where marriage equality is the law.
Death benefits. As a widow or widower, you would be entitled to federal death benefits, including Social Security.
Estate taxes. The question of estate taxes was prompted the Supreme Court case in the first case. Edith Windsor was hit with a $363,000 estate tax bill when her wife died because the federal government didn’t recognize the relationship. Now the widows and widowers of same-sex spouses will no longer have to pay the 40% tax on estates of more than $5.25 million.
Student loans. This is one place where the ruling will cost couples money. Now both spouses will have their income counted when their child applies for federal financial aide. Previously, it was just the biological parent. As the Supreme Court noted in its ruling, “DOMA divests married same-sex couples of the duties and responsibilities that are an essential part of married life and that they in most cases would be honored to accept.” In other words, it’s a small price to pay for equality.