Same-sex couples have won new rights, including Social Security benefits. What ruling means for gay marriage

The Supreme Court just set a series of big changes in motion for same-sex couples in its decision Wednesday.

They’ve won new rights that come with marriage, like inheritance rights and Social Security benefits. And they might be able to get health coverage through the workplace more easily. But they might have a bigger tax bite on the way, too — just like other married couples get to pay.


In a statement Wednesday, President Barack Obama said he’s ordering Attorney General Eric Holder and other Cabinet secretaries “to ensure this decision, including its implications for Federal benefits and obligations, is implemented swiftly and smoothly.”

All of this applies to couples who were married in the states where same-sex marriage is legal — nine states plus the District of Columbia. But it will be legal in three more states by Aug. 1, according to the advocacy group Freedom to Marry.

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What’s not clear — yet — is whether it will apply to same-sex couples who were married in one state and then moved to a different state. But in the long run, the impact will be bigger if the decision leads to similar laws in more states.

Here’s what the decision means for same-sex couples:

Congratulations! Here’s your bigger tax bill

When couples get married, they can file jointly for the first time – but that means many couples won’t get all of the tax breaks that they could have gotten if they’d filed individually.

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So same-sex couples who get married now could face these marriage penalties for the first time. It’s more likely to happen if both people have similar incomes. If one person earns a lot more money than the other, they could win “marriage bonuses” instead – but experts say it’s more common for same- sex couples to have comparable incomes.

Roberton Williams of the Urban Institute, who studied the issue as a Congressional Budget Office analyst, uses the example of the child tax credit – which gives families a $1,000 a break for each child under 17. That credit starts to phase out when an individual earns more than $75,000 a year – but for couples, it gets reduced when they earn $110,000 a year.

So if two people get married, and each is earning around $75,000, their joint income will be about $150,000 – so they’d lose the tax credit faster than if they had stayed single.

That doesn’t mean every same-sex couple has to worry about a marriage penalty – they’ll get lower tax bills if there’s a big gap in their incomes. “Some couples will see their taxes go up, and other couples will see their taxes go down,” said Lee Badgett, an economics professor at the University of Massachusetts-Amherst who has studied the economic impact of same-sex marriage.

But it does mean they’ll pay fewer taxes if one person becomes a stay-at-home spouse – as long as they don’t mind having less money to spend.

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But don’t worry about those estate taxes

One big tax benefit will come to people who won’t have to pay big estate tax bills when their spouses die – but that only affects same-sex couples who are wealthy enough to have a lot of assets.

That was the issue at the heart of the lawsuit by Edith Windsor, who got stuck with more than $360,000 in inheritance taxes after the death of her partner, Thea Clara Spyer. Married people can leave an unlimited amount of assets to their spouses, so the decision is an unqualified victory for same-sex couples with significant assets.

The estate tax isn’t really going to affect that many couples by itself, though – Williams has estimated that fewer than 4,000 estates will have a high enough value to owe taxes (more than $5 million), and not many of them are owned by same-sex couples.

Yes, you can get health coverage

And it doesn’t even have anything to do with Obamacare. It’s all about not being taxed for domestic partner health benefits anymore.

When the Defense of Marriage Act was the law of the land, a same-sex couple had to pay more for workplace health coverage even if they were legally married – because the partner’s health benefits were treated as taxable income. They couldn’t get the same deal as a heterosexual married couple, who can both get coverage through an employer without paying taxes on it.

Now, it could make more financial sense for same-sex couples to get that workplace coverage. Without DOMA, the federal government won’t treat legally married same-sex couples as if they’re just two people living together. It will have to give them the same tax break for workplace health coverage that everyone else enjoys.

When will that happen? Employers and their health plan administrators should have some say in that one. Normally, workers have to wait until open enrollment to sign up their spouses for health coverage. But that changes if there’s a “qualifying life event” — like getting married.

If they treat the Supreme Court decision as a “qualifying life event,” because they have employees who are now considered legally married, those employees might be able to add their spouses to their health coverage pretty soon, according to Vickie Henry, a senior staff attorney at Gay & Lesbian Advocates & Defenders.

“I think people are going to have to think that through, and I’m hopeful that they’ll look at this broadly,” Henry said.

And you can get Social Security benefits

This is a big category for married same-sex couples. For the first time, spouses will be able to get Social Security retirement and death benefits — so get ready to spend lots of fun hours figuring out the rules.

The retirement benefits depend on who’s working and how much they earn. If only one person works, the spouse will be able to get half of their Social Security payment — so that couple would gain the most from the Supreme Court decision. What’s more likely, though, is that both people would be working. If that’s the case, each person would either get their own payment or the spousal payment, whichever one is higher.

Most likely, married same-sex couples will do a bit better under Social Security than if they were single, but not that much better. Because of the way the benefits are calculated, a two-income couple gets higher payments than single people, but not as high as a couple where only one person worked.

That’s because Social Security was designed back in the days before the husband and wife both worked – and it wasn’t written for the new reality of same-sex marriages, in which most couples are likely to have two workers with pretty similar incomes.

There’s also a spousal disability benefit, which could be open to married same-sex couples where one person can’t work due to a disability. If that person’s spouse is 62 or older, or is caring for a child age 16 or younger, he or she can get a small disability payment, too. There are also cases where unmarried children can get the benefit.

And when one person dies, the spouse can get their full Social Security payment. There’s also a lump-sum death benefit of $255 that they can receive.

All of this is new to a lot of same-sex married couples, who were so convinced they would never be eligible for spousal Social Security benefits that they never bothered to learn the rules, said Henry. “They just sort of blacked it out — ‘I’m never going to get it.’ So they don’t know a lot about it,” she said.

Your spouse might get a green card

Just in time for the immigration debate —the decision will make it easier for immigrants’ same-sex spouses to sponsor them to become legal permanent residents.

It’s a development that could affect 35,000 same-sex couples where one of the partners is an immigrant, according to Steve Ralls of the advocacy group Immigration Equality.

It also allowed Sen. Patrick Leahy (D-Vt) to stop pushing his amendment to the immigration bill that would have had the same effect — a measure that could have threatened GOP support for the bill.

In a statement, Leahy said he will no longer ask for a floor vote on his amendment, because “it appears that the anti-discrimination principle that I have long advocated will apply to our immigration laws and binational couples and their families can now be united under the law.”

Even if they don’t live in a state that has legalized same-sex marriage, these couples should be able to take advantage of the ruling as long as they get married in a state where it is legal, Ralls said. For example, a couple that lives in Virginia couldn’t get married there, but they could get married in the District of Columbia, return to Virginia, and then the immigrant’s spouse could sponsor him or her to get a green card, Ralls said.

“There’s very clear precedent that couples can apply for a green card as long as they were married in a state or country that recognized the marriage,” he said.

What military families get

The decision is likely to have a big impact on 17,000 troops and veterans whose same-sex spouses have been shut out of a wide variety of benefits, from health care to military housing — and even the ability to be buried at the same cemetery.

In a statement Wednesday, Defense Secretary Chuck Hagel said the Defense Department would “immediately” start changing its policies to implement the decision.

“The Department of Defense intends to make the same benefits available to all military spouses — regardless of sexual orientation — as soon as possible. That is now the law and it is the right thing to do,” Hagel said.

In February, the Defense Department granted some benefits to same-sex couples on its own authority, including child care, emergency leave, and death and disability compensation. But the rest were up in the air until the Supreme Court ruling, because by law, they apply only to spouses — so the Defense Department said it had no authority to give them to same-sex couples.

Those included some of the biggest military benefits, like health coverage for spouses under TRICARE and housing allowances. They also included the right to be buried together at Arlington National Cemetery.

The ruling opens the door for same-sex military couples to get those benefits — because the Defense Department has said it would change course on them as soon as it got definitive word on the fate of DOMA.

“In the event that the Defense of Marriage Act is no longer applicable to the Department of Defense, it will be the policy of the Department to construe the words ‘spouse’ and ‘marriage’ without regard to sexual orientation, and married couples, irrespective of sexual orientation, and their dependents, will be granted full military benefits,” then-Defense Secretary Leon Panetta wrote in a February memo.