California lawmakers seek millions in federal tax refunds for same-sex married couples
If you were a same-sex married couple before 2013, a lot of senators and members of Congress are pushing to get you tax refunds.
Prior to that year, when the U.S. Supreme Court issued its landmark ruling overturning barriers to same-sex marriage couples in California and some other states were only sometimes able to marry legally.
But they couldn’t file joint federal income tax returns, which meant they could be pushed into higher brackets and owe more. Not to mention trying to figure out how to divide a married couple’s deductions between two returns.
Since the ruling, same-sex couples have been able to file jointly. And now there are strong efforts in the House and Senate to allow couples to amend their returns if they were married prior to 2013. Congress’ bipartisan Joint Committee on Taxation estimates there could be as much as $57 million in refunds available.
“To a lot of people it would be a huge help,” said Cindy Baudoin, an Orangevale financial officer who married her wife in San Francisco in 2004, saw the marriage annulled after a court ruling, and then married again after the U.S. Supreme Court ruled in 2013.
Baudoin is familiar with the tax code, and for years has helped friends with their returns.
She’s seen the confusion that filing separately caused married couples. How do you divide the mortgage expenses? The property tax deduction?
Tax refunds?
Rep. Judy Chu, D-Pasadena, is a chief sponsor of the House bill. The Senate version, authored by Sens. Elizabeth Warren, D-Mass., and Susan Collins, R-Maine, has 46 co-sponsors, including California Democratic Sens. Alex Padilla and Dianne Feinstein.
Taxpayers usually have three years to amend a return. The legislation would allow same-sex couples married before 2013, notably in California, Massachusetts, Connecticut, Iowa, New Hampshire, Vermont, and Washington, D.C., to “file for income tax adjustments prior to 2013, back to the date of their marriage.”
Another bill would require the tax code to eliminate gender-specific references such as “husband” and “wife.” Instead, terms such as “spouse” and “married couple” would be used.
“The tax code still reflects the discrimination of yesteryear,” said Senate Finance Committee Chairman Ron Wyden, D-Oregon. He and Collins are the bill’s chief Senate sponsors.
Whether there’s a windfall waiting for many couples, though, depends on income and other circumstances.
Pete Sepp, president of the National Taxpayers Union, a watchdog group, noted that the tax code has been a “moving target” for years, frequently changing.
Before people start thinking they can file amended returns and get refunds, “they need to do some careful investigation,” Sepp said. They could even wind up owing more money.
California and same-sex marriage
San Francisco first permitted same-sex marriage in 2004, which quickly triggered court challenges. The state Supreme Court ruled in May, 2008 same-sex marriage was legal, but that November, voters approved Proposition 8, a constitutional amendment barring such unions.
Dawn Deason and her wife lived that rocky history. They were first married in a church in 2003, celebrating with family and friends, and then were wed a year later when San Francisco legalized same-sex marriage.
They wed again in 2008, during the brief period when same sex marriage was legal in California, and again in 2013. Prior to 2013, they filed separate federal tax forms.
They got the help of a tax professional to navigate the complications.”She really knew what to do,” said Deason, a retired Sacramento video producer.
Most troubling about the legal chaos,was “feeling we were second class citizens,” Deason said.
The 2020 census found about 1.5% of marriages in California, involving around 100,000 couples, are same-sex.
About 1.8% of marriages in Sacramento County are same-sex couples. Other percentages: 1.5% in Yolo County, 0.8% in Placer County, 0.9% in El Dorado County and 1% in Stanislaus County.
