April 26, 2012
Tom Bourdon and his husband Jimmy have been legally married for seven years and are raising two children in a home they jointly own in suburban Massachusetts, where same-sex marriage has been legal since 2004.
But this weekend, as they finish up their taxes, filing a joint state return as a married couple, they will have to essentially lie to Uncle Sam about the most essential aspects of their life.
They will file two separate tax returns and “divide up” their two children — Lukas, 2, and Maya, 6 months — so that they can claim child-related exemptions, deductions, and credits.
Married same-sex couples cannot file jointly, and instead must misrepresent themselves as “single” on their federal tax forms, sacrificing the $1,000 deduction for married couple
The Defense of Marriage Act (DOMA), enacted by Congress in 1996, does not legally recognize their marriage and so the couples can’t take advantage of any of the tax breaks afforded other families in the United States.
“It feels really strange to be forced to lie,” said Bourdon, 36 and director of the LGBT Center at Tufts University.
“Ethically speaking, we are doing what we are supposed to do and at the same time be accurate,” he said. “It’s a Catch-22. The government forces you into it and there’s no way around it … but we are literally not recognized.”
House Speaker John Boehner, R-Ohio, convened a committee to defend the act, in spite of President Barack Obama’s directive to the State Department to no longer uphold the constitutionality of the law.
“It is regrettable that the Obama administration has opened this divisive issue at a time when Americans want their leaders to focus on jobs and the challenges facing our economy,” Boehner said in a statement to the Washington Post. “The constitutionality of this law should be determined by the courts — not by the president unilaterally — and this action by the House will ensure the matter is addressed in a manner consistent with our Constitution.”
Two million American children are being raised in families where either an adult or a couple is lesbian, gay, bisexual or transgender, according to the U.S. Census. They are part of the changing cultural landscape where only 69 percent of children live with married heterosexual parents.
A report released today, “Unequal Taxation and Undue Burdens for LGBT Families,” argues laws have not kept up with these families. Not only are they being treated unfairly by the federal tax codes, but their children are denied the economic benefits that are afforded all other American families.
The federal government provides families with important tax credits and deductions — worth about $133 billion — to help them raise their children, according to the report.
The Tax Foundation estimates an average-income family gets about $16,781 in tax relief each year.
The report is a supplement to the “All Children Matter” report and was co-authored by theMovement Advancement Project (MAP), the Family Equality Council and the Center for American Progress — all advocacy groups.
The report estimates that the LGBT families can be shortchanged anywhere between $1,490 and $6,209 a year, compared with heterosexual families.
“LGBT families raising kids have an unfair burden, simply because of what their families look like and who they love,” said Emily Hecht McGowan, director of public policy at the Family Equity Council.
“The law has many unintended consequences,” she said. “Kids are getting hurt by these laws.”
U.S. Census data reveals that same-sex parents are most likely to raise children in Mississippi, followed by Wyoming, Alaska, Louisiana, Oklahoma, Kansas, Alabama, Montana, South Dakota and South Carolina. In about half of those states, an estimated 1 in 4 children live in poverty.
Same-sex families also have difficulty securing legal ties to their adopted children in many of these states, posing an additional economic and emotional burden. The IRS requires a child to be biologically related or legally adopted to declare tax credits.
LGBT Families Hit Hard at Tax Time
An estimated 49 percent of LGBT people live in states with laws banning marriage, and 37 percent live in states with constitutional bans on any form of relationship recognition.
Same-sex marriage is legal in six states and the District of Columbia. Maryland and Washington state are poised to enact laws doing the same.
But while these families get the same benefits as heterosexual families in states where marriage is legal, they do not at the federal level.
“The most stressful piece is financial,” said Laura Deaton, policy research director for the Movement Advancement Project and lead researcher on the report.
For low-income families, that means less money to meet basic needs, and for others, it may make it more difficult to save for a child’s education.
“Our tax system has always been very pro-family and designed to create an incentive that encourages people to live in families and to support their children,” said Deaton. “But that is not there for same-sex couples.”
“It’s kind of ironic,” she said. “These are families who do the same work, but the same rules don’t apply.”
Bourdon and his husband both work at universities, but they say it is difficult to find CPAs who have expertise in their unique tax situation. Those who are knowledgeable in the field can charge from $500 to $4,000 for such a return.
“It’s so much more complicated and you pay a lot more money to get professional help,” said Bourdon, so he does it himself with the online program Turbo Tax, which is attuned to the needs of same-sex parents.
“I just hope I am doing it right,” he said. “They steer you in the right direction.”
One spouse will take the house as a deduction on the federal return.
“Jimmy and I make a fairly close salary,” said Bourdon. “Still, what I end up doing is having to run so many different scenarios — which one will help or harm us financially.”
“It’s absolutely absurd,” said MAP Executive Director Ineke Mushovic. “Essentially, the federal government is asking families to lie.”
Legal groups have begun to advise LGBT parents who are married to indicate on their tax forms that the only reason they are checking the box as “single” or “head of household” is because they are required to do so, according to Mushovic.
Some in California file the required “single” returns then file an amended return so “it’s on the record,” say advocacy groups.
Congress held a hearing on DOMA repeal last summer and now several LGBT couples and their families are making legal challenges that are working their way through the courts.
Bourdon sees the same financial inequities when the children of LGBT parents apply for financial aid at the college level.
Not only are they forced to lie on the form — if they have two moms or two dads, they can only list one of them and their financial details,” he said. “It could benefit you or hurt you.”
But some employers are now leveling the playing field for their LGBT employees who are married by “grossing up” their incomes, according to Bourdon. “It doesn’t give you any more money, but you end up in the same place. They try to erase the inequity.”
But the law still makes LGBT families feel “clearly stigmatized and not accepted,” he said.
“When people feel like they have to hide for so long about their identity and family — and no we don’t have to anymore — but we are forced to lie again [by the government.]”
Still, Bourdon is optimistic that the laws will eventually catch up with the changing cultural mores.
“Absolutely, I feel that the tide is turning and people are starting to see more acceptance for same-sex partnerships,” he said. “But we are still burdened by so many unfair laws that deny us protection in employment and housing and relationship status.
“And we live in a country where the federal government doesn’t recognize our relationships.”