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With the deadline for individual income-tax returns little more than two weeks away, storefronts are teeming with signs and banners touting ”instant” tax refunds, some public buildings are littered with tax publications, and accountant acquaintances have disappeared from the social scene. An addition to the festivities is the Domestic Partnerships Joint Filing Act of 2006, which became D.C. law March 14.
The act means that those registered as domestic partners in the district will be allowed to file their 2007 D.C. taxes jointly in 2008.
”Filing taxes jointly is a significant recognition of partners by the government,” offered Bob Summersgill, on behalf of the Gay and Lesbian Activists Alliance of Washington, D.C., in his November testimony to the City Council’s Committee on Taxation and Revenue — now the Committee on Finance and Revenue — chaired by Councilmember Jack Evans (D-Ward 2), who introduced the measure. ”While actual taxes for couples may go either up or down depending on their circumstances, the symbolic value far outweighs any cost to the couples or the district.”
For example, for a hypothetical D.C. domestic partnership, with each partner earning $50,000 and claiming only the standard deduction, the 2006 D.C. taxes for each would be $3,183, using the D-40 form. The same couple, filing jointly — again claiming only the standard deduction — would owe $7,294, or $928 more than the total paid by both filing separately. Of course, itemized deductions might change that outcome dramatically.
Regardless, the new D.C. law shouldn’t be burdensome in any situation, as it’s optional. Not so for same-sex couples in some other jurisdictions. In California, for example, where ”community property” laws enforce a blending of registered domestic partners’ finances, a similar law set to take effect has some worried.
”My personal opinion is that this is a terrible move. It provides minimum tax relief, and maximum tax-preparation headaches. I’m worried it’s going to discourage people from registering,” says Frederick Hertz, an Oakland-based taxed attorney and author of A Legal Guide for Lesbian and Gay Couples, specifically regarding the California law. ”In California, you must file as if married. … [And] in California, if you’re married, your returns are coordinated in a way. The rules for married people filing separately are very different than for single people filing separately. The rules for calculating your taxes are different if you’re married.”
In Massachusetts, which does not follow California’s ”community property” rules, but does allow same-sex marriage and, therefore, treats same-sex married couples the same as their opposite-sex peers, things can get complicated, though to a seemingly lesser extent. Still, Boston-based Gay & Lesbian Advocates & Defenders, who helped legalize same-sex marriage in Massachusetts, created a simple on-line guide for same-sex couples’ tax issues.
”How to deal with federal and state income taxes is one of the areas of greatest legal uncertainty,” it reads, in part. ”It is made particularly complicated by the possibility that your state may respect your marriage, but the federal government will not.”
While not a tax attorney, attorney Michelle Zavos, a lesbian, has more than 25 years experience working in metropolitan D.C., specializing in adoptions, estate planning and probate, often for GLBT clients.
”I think it’s certainly worth people looking at it both ways, to see if there’s an advantage [to filing jointly],” she says, adding that some people may not be aware that they must register with the district as domestic partners before filing jointly. Same-sex couples married or partnered in some other official way outside of Washington are ineligible as yet to file jointly in D.C.
”It’s absolutely a good thing,” Zavos says of the new law, reckoning Hertz’s suggestion that tax laws misaligned between federal and state levels may complicate things to a degree — at least in California — that same-sex couples shy away from marriage and partnerships, and that tax attorneys may avoid such couples for fear of giving back advice, may be a bit alarmist. Zavos notes however, that while the new law is good, other rights already available to D.C. domestic partners, such as not being compelled to testify against one another or hospital visitation, likely have more tangible value.
Whatever its worth, the Domestic Partnerships Joint Filing Act of 2006 does help illustrate the intersection of the unofficial gay motto, ”We are everywhere,” and the axiom that holds the only two certainties in life are death and taxes. So where does that leave death? With the Domestic Partner Claim of Dead Bodies from the Anatomical Board Act of 2007, introduced March 6 by Councilmembers David Catania (I-At large) and Tommy Wells (D-Ward 6). This legislation aims to give domestic partners legal standing as ”related” in order for a surviving partner to make funeral arrangements.
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