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A new CNNMoney study conducted with H&R Block puts another price tag on hefty price of marriage inequality, finding that same-sex couples pay up to $6,000 a year more in taxes thanks to anti-gay discrimination. Details follow.
The persistence of the "Defense of Marriage Act"—which forbids gay and lesbian couples from filing joint federal tax returns whether or not they live in a state that recognizes them as equal citizens—costs LGBT families thousands of dollars each year.
Once case study examined for the article found a couple shelling out $4,543 more than a straight couple.
One scenario involved families with one spouse earning $100,000 and the other spouse staying at home with the family's two kids.
In the same-sex family's case, the working spouse files as "head of household," and the stay-at-home spouse is considered a "qualifying relative."
Say that couple reported no other income or deductions. In that case, the same-sex household's federal tax bill is $15,199, which includes tax the head of household must pay on health insurance premiums to cover the stay-at-home spouse. That's $4,543 higher than the straight couple's liability.
Throw in the child tax credit that is more readily available to straight married couples than "head of household" same sex couples and the price tag jumps $1,000.
Aside from the discrepancies same-sex couples face from being unable to file jointly, CNN highlights other factors that cost them more than their heterosexual counterparts:
Many same-sex spouses don't qualify for the same marital exemptions given to other families for inheritance taxes and gift taxes. In addition, same-sex households receive lower tax exclusions for capital gains on the sales of a home (unless the home is jointly owned and each spouse qualifies for the exclusion).
All of this is not only costing same-sex couples more, but it's a paperwork and compliance nightmare.
Same-sex families who live in states where gay marriage is recognized typically have to fill out up to four separate returns -- including mock federal returns -- to cover both their state and federal taxes. Plus, hiring a tax preparer to take on these more complicated returns tends to be significantly more expensive.
Head to CNN for the full H&R Block study.
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