No Joint Filing For Married Gays

In responses to inquiries from gay and lesbian couples who have married in locales such as Massachusetts, Connecticut, and Canada, the New York State Department of Taxation and Finance has in recent weeks been sending back a letter informing them that they cannot file jointly on their state income tax forms due April 15.

A statement from the department, however, received by Gay City News after this week's print edition was published, explained it was continuing to examine its position on the filing status question.

“Following the Governor's directive, the Tax Department is currently reviewing our policy on this and other same-sex marriage-related tax issues,” Thomas Bergin, a spokesman, wrote via email. “We expect to issue a statement on this subject shortly.”

In response to inquiries from gay married couples, the state Department of Taxation and Finance is sending a letter informing them they cannot file jointly on their state income tax forms.

The position New York tax officials have taken to date in the letters sent out in response to inquiries is at odds with a directive last May from Governor David Paterson's counsel instructing state agencies to bring their procedures into line with a statewide legal precedent that marriages by same-sex couples legally entered into in other jurisdictions be recognized here.

“Under current New York law, the filing status of a couple for New York purposes must be the same as their filing status (separate or joint) for federal tax purposes,” read a letter that Robert D. Plattner, Taxation and Finance's deputy commissioner, sent December 12 to Franc Martarella, an Upper West Side gay man who had posed a filing status question to the governor's office on behalf of him and his husband, who married in Canada in late 2007.

Plattner's letter goes on to note that because of the federal Defense of Marriage Act, the Internal Revenue Service does not allow married gay and lesbian couples to file jointly. Curiously, the letter cites the specific section of the federal code for DOMA, but does not provide the same detail regarding the New York statute requiring that filing status here match that on federal returns.

The posture articulated in Plattner's letter reaffirms an advisory opinion issued by Taxation and Finance's Office of Tax Policy Analysis in 2006 in response to a petition from a married gay couple. Plattner, however, specifically refers to the May 14 directive from Paterson's office, making clear that Taxation and Finance is sticking to its earlier position even in the wake of the governor's widely publicized conclusion that New York must accord full recognition to legally married gay and lesbian couples.

Paterson is an outspoken advocate of a marriage equality bill passed by the State Assembly in 2007 that could get a vote in the new session of the Senate with Democrats now in charge.

In issuing its directive in May, the governor's office made note of an intermediate appellate ruling last February in a case in which Patricia Martinez, a lesbian who married in Canada, sued her public sector employer, Monroe Community College in Rochester, for refusing to grant her wife spousal health benefits. The unanimous panel found that under longstanding New York common law any valid marriage from another jurisdiction is due full recognition here so long as it is not “abhorrent” to the laws or public policy of the state – a description reserved for situations involving incest, polygamy, or relations with someone clearly viewed as too young to consent to sex.

The Martinez ruling has not yet been reviewed by the state's highest court, but unless it is overturned there or contradicted by another intermediate appellate panel, it is binding on courts statewide.

According to Art Friedson of Taxation and Finance's Office of Tax Policy Analysis, same-sex couples could only file jointly if the state were to enact legislation “de-coupling” the filing status provisions of New York tax procedures from IRS standards. He suggested that even enactment of marriage equality legislation would not cure the problem absent specific de-coupling language.

Friedson said that Taxation's Office of Counsel could provide greater detail on the determination it made regarding joint filing. Bergin's email message was a response to written questions submitted to the Office of Counsel by Gay City News.

The governor's office did not respond to a request for comment.

One state official speaking on background, however, acknowledged that the administration is continuing to review the issue of joint filing even though Taxation and Finance is advising married gay couples that they will not be able to do so.

Susan Sommer, an attorney at Lambda Legal who oversees that group's marriage equality efforts, concurred that the question of joint filing is not necessarily a settled matter.

Noting that state agencies generally have been working “in good faith” to comply with Paterson's directive, she said, “It remains to be seen if the tax code presents special issues.” Lambda, she said, has “been advocating with the state government to assist in their determination.”

Sommer said that one key issue is whether married couples can be relieved of the tax burden on the income imputed to a gay or lesbian person whose employer gives their spouse health benefits. Such benefits are extended to heterosexual spouses without any tax consequences, but under federal and state law to date they are taxed as income in the case of gay or lesbian spouses.

“It is our understanding that the state tax department is reevaluating how to handle personal income tax filing by married same-sex couples in New York and considering how to treat employers' contributions for spousal health benefits,” she told Gay City News.

Martarella said that his husband has paid an additional $2,500 over the past year in state and federal taxes based on the spousal health benefits Martarella receives. He said he is retired and has limited his IRA draw so he suspects that the financial implications of being able to file jointly with the state would be “substantial.”

Lambda is committed to continuing to work with the Paterson administration on this issue, rather than challenging the tax filing policy in court.

“Regardless of the outcome of the tax department determination, I wouldn't view this as an area for a legal challenge by the LGBT community,” Sommer said. “If anything, it just drives home that we should be calling on the State Legislature to enact legislation to allow same-sex couples to get married here in New York.”

She was confident that marriage equality legislation would resolve the current bar to joint filing by same-sex couples on their state forms.

The Empire State Pride Agenda, New York's LGBT rights lobby which is focused on the fight for marriage equality in the Legislature, has been looking at the joint filing issue alongside Lambda, but declined specific comment.

Daniel O'Donnell, the out gay Upper West Side Democrat who led the marriage equality bill to passage in the Assembly in 2007, said he is “very well versed” on the filing issue and argued that, in response to the governor's marriage recognition directive, “the most complicated thing we would have to do is de-coupling federal and state taxes.”

He said tax accountants have told him that in general “there is no financial harm done to couples by this situation.” Given that, he said, the more important task before the Legislature is getting Senate approval for the marriage equality legislation.

“That doesn't mean we will not endeavor to address the tax filing question in the future,” O'Donnell said, should the marriage bill lift prove too difficult in the upcoming legislative session.

The hurdle married gay and lesbian couples continue to face in their state tax filing stands in contrast to progress recently announced in other key public policy areas.

In December, the state Department of Health announced that birth certificates for the children of gay and lesbian married couples will now automatically list both parents. Department officials said they had been working on the birth certificate question since the governor issued his directive, and sped up their efforts to accommodate a lesbian couple who had filed suit seeking that both of their names be listed in anticipation of the birth of their daughter. Carolyn Trzeciak and Nina Shield Trzeciak, an Ulster County couple who married in Canada, were eager that both their names be listed on the birth certificate of a child that Nina was due to deliver.

Unlike the rest of the state's municipalities, New York City maintains its own health records and is working to catch up with the state policy.

In November, State Insurance Superintendent Eric Dinallo issued a bulletin to all companies writing policies in New York informing them that they are required to treat same-sex married couples like any other married couples in offering policies for health, life, disability, and long term care insurance.