eTax Alert™
Supreme Court Rules Constitution Guarantees Right to Same-Sex Marriage

On June 26, 2015, the Supreme Court ruled that the U.S. Constitution guarantees the right of same-sex marriage and requires all state governments to recognize marriages regardless of gender (see Obergefell v. Hodges, 14–556). This is a long-sought victory for the gay rights movement.

The 5-4 decision, a culmination of decades of litigation and activism, came against the backdrop of changes in public opinion. Polls indicated that most Americans now approve same-sex marriage. Prior to today’s decision, 37 states (up from fewer than 20), plus the District of Columbia, have legalized same-sex marriage in the 2 years since the court’s decision in United States v. Windsor in June 2013.

Proponents argued that marriage is a fundamental right for any two people, regardless of gender, and that due process and equal protection clauses of the Constitution give gays and lesbians equal marriage rights. Over 75 briefs were submitted to the court, including from major business leaders and most Democrats in Congress.

Same-sex couples face the same financial constraints as opposite-sex married couples, including the marriage penalty in taxation. While social service providers normally do not count one partner’s assets toward the income means test for welfare and disability assistance for the other partner, a legally married couple’s joint assets are normally used to calculate whether or not a married individual qualifies for assistance.

Prior to the June 26, 2015, Supreme Court decision, same-sex couples faced both financial and legal disadvantages, including but not limited to:

• Legal costs associated with obtaining domestic partner documents, including powers of attorney.
• Decisions regarding inheritance. Opposite-sex married couples can inherit an unlimited amount from a deceased spouse without incurring estate taxes, but same-sex partners were subject to inheritance taxes.
• Same-sex couples were not eligible to file jointly as married couples; therefore, they could not take advantage of lower tax rates if the individual income of the partners differed significantly.
• Employer-provided health insurance coverage for same-sex partners incurred federal income tax.

Same-sex couples faced higher health care costs associated with a lack of insurance and preventative care.