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Entries in same sex couples (10)

Tuesday
Aug012017

Return to Windsor: A Novel Tax Code Correction

Tax Law Certified SpecialistCalifornia Bar Certified Specialist in Tax Law

 

by Michael Hackman

818.907.3279

 

 

 

Here’s the next chapter in the saga known as Edith Schlain Windsor v. The United States of America. (For a quick recap, please read Tax & Estate Planning – Small Win for Same Sex Couples?)

Tax Refund for Same Sex Married Couples

Two representatives of the state of Massachusetts, Senator Elizabeth Warren and Congressman Richard Neal, have introduced a new bill, the Refund Equality Act, to allow same-sex married couples to amend their tax returns as far back as the date of their marriage. But what does this mean, exactly?

The backstory:

Current law allows any married couple who previously filed tax returns as individuals, to amend their returns to file jointly. They may amend up to three years of filings.

The U.S. Supreme Court’s decision to overturn the Defense of Marriage Act (DOMA) in 2013 (this time it was the U.S. v. Windsor), and its follow-up landmark decision in Obergefell v. Hodges in 2015 (which recognized same-sex marriage as a fundamental right protected by the U.S. Constitution), meant, among other important considerations, that gay married couples in any U.S. state could finally match their straight counterparts when it came to yearly tax savings.

But the three year cap created a problem. Same sex couples were out of luck when it came to tax refunds for the years prior to the 2013 Windsor decision, if they were married before then – even though DOMA and bans on gay marriage were deemed unconstitutional.

Revising Tax Code A Matter of Equal Rights

Proposed Bill Tax Refund for Gay Married CouplesThe Refund Equality Act of 2017 seeks to make amends, literally and figuratively. In a press release, Congressman Neal stated:

This bill would codify into law an important correction that would enable same-sex married couples to go back and claim the tax refunds and credits for which they qualify. The Supreme Court has ruled as such, and now it's time for Congress to act and make sure all Americans are treated with the fairness and equality they deserve under the law.   

Before and after the Windsor decision, the Internal Revenue Service lacked the authority to override time limitations in the tax code, but exceptions for other groups did exist. The Refund Equality Act attempts to fix the disparity by creating an exemption specifically for same-sex couples to apply for adjustments dating back to the date of marriage.

The Joint Committee on Taxation estimates $67M would be returned to the qualifying couples.

Every good story has a bit of irony, and this one does as well. Edith Windsor and her spouse may not qualify for a tax refund under this new bill. Why? Under Section 2 of the current bill, an amendment to Internal Revenue Code 1986 would stipulate regarding spouses:

“Who were married under state law (as such term is used in Revenue Ruling 2103-17). . . .”

Windsor married in 2007, which could mean six years of amended returns between then and 2013. But the couple married in Canada!

 

Michael Hackman is the Chair of both our Tax, and Trust & Estate Planning Practice Groups.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

Tuesday
Sep152015

Can Kim Davis Be Fired? What CA Employers Should Know About Religious Accommodations

Wage and Hour DefenseAttorney for Employers

by Sue M. Bendavid

818.907.3220

 

Last June, the U.S. Supreme Court determined that same-sex marriages are a fundamental liberty protected by the 14th Amendment of the U.S. Constitution – and that states must issue marriage licenses to same-sex couples.

Kim Davis, a county clerk in Kentucky disagreed, citing religious reasons for refusing to sign marriage licenses for gay couples. Davis even spent time in jail for her continual refusal to do so, which promptly led many to wonder, "Can Kim Davis be fired?"

The short answer is no. Davis was elected – she can either resign, be impeached, or finish her term. But if she were NOT a public official chosen via election, merely an at-will employee for a private company…could she be fired then? What if she worked to sell gowns in a bridal shop here in California?

The answer then becomes a little more complicated.

Federal Laws & Religious Discrimination

Many employers know that Title VII of the Civil Rights Act of 1964 prohibits religious discrimination in the workplace. But some employers will not know that the same federal law also prohibits job segregation – an employee like Davis refusing to perform duties because of religious beliefs might be protected from being forced to take another position, such as one with no customer contact, for instance.

Also, Title VII mandates accommodations when reasonable. Workers citing religious reasons for refusing to perform a task or conform to workplace rules (e.g. a bartender refusing to wear a revealing uniform, a healthcare worker refusing to be vaccinated, or a floral designer refusing to provide flowers for a same-sex wedding) may suggest or be offered workaround solutions.

If the requested accommodation does not result in undue hardships such as: additional excessive costs, safety concerns, decreased efficiency, or infringement on someone else's rights – the accommodation should be implemented by the employer.

State Protections for Employees

California's Fair Employment and Housing Act (FEHA) is similar to Title VII in principle – it also prohibits employers from discriminating against applicants and employees because of religious beliefs and requires reasonable accommodations to be made.

Under FEHA, an employer would have to show that there will be significant difficulty or expense should the employer make a religious accommodation.

Keep in mind, there may be reasons to terminate an employee, but employers should be sure those reasons are valid and not in violation of state or federal protections.

In Nava v. Safeway Inc., for example, employee Juan Nava was terminated for destruction of  company property one week after he admitted to being offended by and subsequently removing, a gay pride poster from an employee break room. Nava sued for wrongful termination.  Safeway responded with an anti-SLAPP motion moving to dismiss the case.  Safeway argued that the lawsuit sought to censor and interfere with Safeway’s right to freedom of expression.

The trial court decided for Safeway, but a Fifth Appellate District Court reversed – finding that (although it was a close call and Safeway might later prevail) Nava could also potentially prevail with his wrongful termination suit. Therefore, the Court allowed the lawsuit to proceed.

Employer Takeaway

So back to the question: What do you do with an employee like Kim Davis?

In California, you accommodate when you can because both state and federal laws protect the religious beliefs and practices of the employee.  Absent undue hardship, you cannot take adverse action, like cutting back her hours or denying her training opportunities.  Nor should you let other employees mock her for her beliefs or anything else.  

Accommodations may cost you time or money. But in the long run, it will be less expensive than a discrimination suit.

Sue M. Bendavid is the Chair of the Employment Practice Group at our firm. Contact her via email: sbendavid@lewitthackman.com; or by phone: 818-907-3220 for more information.

Friday
Jun262015

Supreme Court: 14th Amendment Requires Recognition of Same-Sex Marriage

Gay Marriage LawCalifornia Bar Certified Specialist, Family Law

 

 

by Vanessa Soto Nellis
818.907.3274

 

 

 

 

In 1883 the Supreme Court of the United States (SCOTUS) ruled that couples engaging in interracial sex (Pace v. Alabama) are not in violation of the Fourteenth Amendment to the United States Constitution, which was ratified just 15 years previously. Amendment XIV addressed citizenship rights and equal protections in a post-Civil War era when former slaves struggled for recognition.

In 1967 SCOTUS went a step further in Loving v. Virginia, invalidating state laws prohibiting marriages between interracial couples.

Nearly 50 years later, the Supreme Court in a 5-4 decision re Obergefell v. Hodges, invalidated 13 state's laws prohibiting same-sex marriages. SCOTUS cited Confucius: "marriage lies at the foundation of government" and Cicero, "The first bond of society is marriage; next, children; and then the family."

…history is the beginning of these cases. The re­spondents say it should be the end as well. To them, it would demean a timeless institution if the concept and lawful status of marriage were extended to two persons of the same sex. . . The petitioners acknowledge this history but contend that these cases cannot end there. Were their intent to demean the revered idea and reality of marriage, the petitioners’ claims would be of a different order. But that is neither their purpose nor their submission. . .it is the enduring importance of marriage that underlies the petitioners’ contentions.

History circles back. SCOTUS rulings for Pace, Loving and Obergefell relied heavily on the 14th Amendment which attaches a Due Process Clause, upholding the Bill of Rights, or first 10 amendments to the Constitution. In Obergefell, Justice Anthony Kennedy states that the Bill of Rights gives protections for "personal choices central to individual dignity and autonomy, including intimate choices defining personal identity and beliefs."

Further, a judicial responsibility exists, which may sometimes be guided by traditional views:

That method respects our history and learns from it without allowing the past alone to rule the present. . .The generations that wrote and ratified the Bill of Rights and the Fourteenth Amendment did not presume to know the extent of freedom in all of its dimensions, and so they entrusted to future generations a charter protecting the right of all persons to enjoy liberty as we learn its meaning.

The SCOTUS opinion for Obergefell is a landmark ruling. The respondents claimed there hasn't been enough rhetoric for the courts to make such an important decision. But the opinion announced today disagreed, listing countless referenda, debates, studies and an untold number of court cases. There have been more than 100 amici briefs ('friend of the court' filings) from businesses, labor unions, religious organizations, etc., all stating their opinions or agendas regarding same-sex marriage. There has been the Defense of Marriage Act (DOMA) defining marriage as a union between one man and one woman, and then the repeal of DOMA.

Despite the respondent's appeal to wait, the Obergefell opinion contends that the Constitution allows for asserting a fundamental right without waiting for legislative action. Therefore, the SCOTUS opinion concludes:

No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice and family…Their (plaintiffs') hope is not to be condemned to live in loneliness, excluded from one of civilization's oldest institutions…The Constitution grants them that right.

 

Vanessa Soto Nellis a California State Bar Certified Specialist in Family Law. Contact her via email: vnellis@lewitthackman.com; or by phone: 818.907.3274.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Wednesday
May142014

Retirement Planning for Same-Sex Married Couples

Trusts & Estate Planning Attorney

by Kira S. Masteller
818.907.3244

 

In September, the Internal Revenue Service issued Revenue Ruling 2013-17 which clarified when, for federal tax purposes, the IRS will recognize same-sex marriages.

As of September 16, the Department of the Treasury and IRS recognized a same-sex marriage if the couple was married in a state where it is legal. It became the state of celebration that mattered to the feds, rather than the state of domicile.

Now the IRS has released further guidance, which addresses questions regarding certain retirement plans for same-sex married couples. Revenue Ruling 2014-19:

1. Describes when marital status is relevant to the payment of retirement benefits;

2. Outlines how tax requirements for same-sex married couples should be satisfied following the Supreme Court's decision in United States v. Windsor – in which Section 3 of the Defense of Marriage Act (marriage declared to be between one man and one woman) was deemed unconstitutional – and  Revenue Ruling 2013-17; and  

3. Provides guidance regarding when retirement plans should be amended for compliance.

 

Same-Sex Retirement Benefits: The Basics

Now is a good time to review your retirement plan, check your beneficiary designations, and check with your employer to see if the retirement plan will be amended to provide additional benefits to same-sex surviving spouses.

Keep these three things in mind:

1. Ruling 2014-19 is retroactive, applying the 2013-17 definitions of married couples for tax purposes to retirement plans. Remember, it's the state of celebration, rather than the state of residence that is important now.

So if a same-sex couple married in California and later moved to a state where gay marriage is not recognized – the surviving spouse will still be eligible to receive benefits according to the IRS. 

 

2. If a spouse passes away on or after June 26, 2013, the same-sex surviving spouse will be entitled to profit-sharing and stock bonus plans, and other potential benefits, if the spouse is named the primary or partial beneficiary.

If the deceased participant did not designate a beneficiary, the plan administrator must recognize the spouse (gay or straight) as the default beneficiary.

 

3. If someone other than the spouse is the designated beneficiary, the surviving spouse whether straight or gay, must have provided written consent to that effect.

If you need more information regarding who to designate as beneficiary for your estate's assets, please read Designated Beneficiary Assets: Consider Your Income, Capital Gains & Estate Taxes.

 

Kira S. Masteller is a Gift Tax and Estate Planning Attorney at our firm. Contact her by phone: 818.907.3244 or email: kmasteller@lewitthackman.com for more information.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Thursday
Sep192013

Over the Rainbow: Treasury Allows Gay, Married Couples to File Taxes Jointly 

by Lovette T. Mioni

 

As of September 16, 2013, same-sex, legally married couples must file federal tax returns as married couples – whether they are filing jointly or separately. Both the Internal Revenue Service and the Department of the Treasury announced August 29th that they will now recognize the State of Celebration rather than the State of Residence/Domicile, for federal tax purposes.

The announcement came following the U.S. Supreme Court's rulings regarding DOMA (Defense of Marriage Act) in June. But what exactly, does the State of Celebration policy mean?

Gay couples married in California but who live in Nevada for example – where same-sex marriage is not recognized – should complete federal tax returns as married, since California sanctions these weddings.

Things get a little more complicated for same-sex couples filing state income taxes where gay marriage is not recognized, i.e. in Hawaii. They may need to file two separate, state returns. Californians won't need to worry about this though, since our state culls info from the federal filing to apply its own rates to the California income tax return.

This State of Celebration approach by the Treasury and IRS affects the following provisions on federal tax returns:

  • Child Tax Credits
  • Earned Income
  • Employee Benefits
  • Gift and Estate Taxes
  • IRA Contributions
  • Marriage Penalties

Couples who are registered domestic partners or who have same-sex unions will neither benefit, or be affected by, the State of Celebration policy.

The same-sex couples who will benefit most from the federal policy, are those that have a large disparity in income between the two partners. Tax savings are greatest for those couples with one working spouse, for example.

Based on household income $100K, standard deduction, no children and no tax credits. Source: Bankrate.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

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