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What Federal Benefits Do Gay Married Couples Have?

A demystification of gay marriage benefits.

What Federal Benefits Do Gay Married Couples Have?

Even though the Defense of Marriage Act (DOMA) -- the law that allowed states to refuse to recognize same-sex marriages granted in other states -- was deemed unconstitutional by the Supreme Court over five months ago, many gay and lesbian married couples find navigating the system for financial benefits of their marriage bewildering.

For starters, gay couples can’t get married in every state. Even when they get married in states friendly to same sex marriage, some states like Pennsylvania and Florida, do not extend the same benefits to them.

“We want to remind people that, as much as there’s this great advance with federal recognition, we still have a patchwork of state laws,” said Brain Moulton, the legal director of Human Rights Campaign.

Based on the Supreme Court’s ruling in the monumental court case United States v. Windsor earlier this year, same-sex spouses are now subject to all federal tax provisions where marriage is a factor.

More specifically:

IRAs: Same-sex married couples now have the same privileges and liabilities as heterosexual spouses when it comes to any Individual Retirement Accounts (IRAs). According to Wall Street Journal writer Kelly Greene, “a worker could fund a spousal IRA for a nonworking spouse, up to the maximum of $5,500 a year (or $6,500 for those 50 or older).” Keep in mind that some states require that a spouse inherit an IRA in the event of death. “It is a particularly important new benefit for same-sex couples with children. In the past, the survivor, at his or her death, couldn't leave the inherited IRA to his or her own beneficiaries to take out over their own life expectancies,” Greene writes.

401(k)s: As for 401(k)s, Federal pension law demands the spouse is the primary beneficiary. Gail Buckner, a writer for Fox Business, breaks it down further: “DOL [Department of Labor] oversees company-sponsored retirement plans covered by ERISA, the Employee Retirement Income Security Act of 1974. This includes 401(k), 403(b), 457, profit-sharing and defined benefit retirement plans.”

Estate Taxes: Good news for same-sex spouses. As Fran Hawthorne explains in the New York Times, “same-sex couples will also be able to reduce or even eliminate federal taxes on estates and gifts.”

Social Security and Veterans Benefits:  Cloudy. But with each new legal battle, the landscape becomes more clear.

Do you think the government should do more to explain changes after major Supreme Court rulings? Let us know in the comments or a blog post?

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