Warren Proposal Could Mean Tax Refunds For Married Same-Sex Couples

Sen. Elizabeth Warren (D-MA)

Massachusetts Senator and presidential hopeful Elizabeth Warren has proposed a plan to allow married same-sex couples to possibly recoup some of the taxes they paid before the federal government recognized marriage equality.

Warren recently re-introduced her proposal, titled ‘The Refund Equality Act,’ in the U.S. Senate.

Originally introduced by Warren in 2017, the goal of the legislation would be to allow same-sex couples to file amended tax returns in order to collect funds they paid when they were legally married but not allowed to file as married couples.

Current law allows Americans to file amended returns reaching back as far as three years, but Warren’s proposal would give same-sex married couples the right to re-file returns for the entire period the couple has been married.

In a statement, Warren said, “The federal government forced legally married same-sex couples in Massachusetts to file as individuals and pay more in taxes for almost a decade.”

It wasn’t until marriage equality became law that gay & lesbian couples could jointly file tax returns—so they paid more in taxes. Our government owes them more than $50M for the years our discriminatory tax code left them out. We must right these wrongs. https://t.co/OZQcfVilSs

— Elizabeth Warren (@ewarren) June 23, 2019

In 2004, Warren’s state of Massachusetts became the first in the nation to recognize same-sex marriage.

But it wasn’t until the 2013 ruling by the U.S. Supreme Court, U.S. v. Windsor, that the federal government (including the Internal Revenue Service) allowed LGBTQ married couples to access some of the tax advantages of being married.

For instance, I married my husband in 2003 in Toronto, Canada. While it was a beautiful, emotional day in my life, once we returned to the U.S. it was (in legal terms) largely ceremonial as it wasn’t recognized at home.

Michael and I getting married in Toronto in 2003

Living in California at the time, other than my using the actual term ‘husband’ to refer to my guy, it didn’t count for much in terms of legal standing until the state Supreme Court ordered same-sex marriages recognized in 2008.

Proposition 8 interfered with that, but after a long back and forth, we were allowed to keep our legal status. But, that's another story...

But, as our marriage wasn’t recognized by the federal government, we continued to file our tax returns as “Single.”

Until - the Windsor decision.

Our accountant did take advantage of the new filing status, and I can tell you it made a BIG difference in our taxes.

CNBC reports that “married couples have access to higher standard deductions: $24,400 for joint filers in 2019, compared to $12,200 for singles.”

Additionally, couples who file jointly enjoy wider income tax brackets compared to singles.

That’s not to say every couple would benefit financially from refiling their returns.

Known as the “marriage penalty,” two spouses who have similar incomes might end up in a higher tax bracket.

But in the case of married couples where one spouse makes more/less than the other, the joint tax bill could be lower.

The Joint Committee on Taxation reported last week that perhaps $57 million could be reclaimed under Warren’s legislation.

Rep. Judy Chu (D-CA) has introduced the companion bill in the House as well.