Same-Sex Marriage Offers Tax Equality

As marriage equality is spreading across the country, GLBTI couples are beginning to realize the many benefits that same-sex marriage affords them. One of the most important and advantageous benefits of the legalization of same-sex marriage is the favorable tax treatment for the parties in the event of a divorce. Before New Jersey began permitting homosexual couples to legally wed, gay and lesbian couples were only allowed to enter into a civil union or domestic partnership. Although New Jersey's laws regarding the dissolution of a civil union or domestic partnership are virtually the same as the laws that govern a heterosexual divorce, the laws of the federal government are very different. For instance, when same-sex parties end their NJ civil union, alimony or spousal support payments are typically categorized as gifts for the purposes of filing federal taxes which exposes the parties to a higher tax liability than legally married couples. Further, the exchange of assets between parties in equitable distribution was considered a taxable event under federal tax laws. On the other hand, in the context of legalized same-sex marriages, alimony payments result in equalized tax treatment for the parties. The party who is required to make alimony payments to his or her ex-spouse is permitted to take a federal tax deduction for their payments, which is a benefit for that party. The party receiving the alimony sum is required to file the payments as taxable income when reporting to the federal government. In addition, the exchange of assets and property during the equitable distribution phase of the divorce is not considered to be a taxable event under federal tax laws. Overall, as the number of states that recognize marriage equality continues to increase, many more homosexual couples whose legal marriages end in divorce will be able to realize some of the federal tax benefits that have been available to different-sex couples for decades. Whether a couple is involved in a same-sex or heterosexual relationship a divorce is a very complicated and emotional process. If you are a gay or lesbian couple who is battling in a same-sex divorce it is imperative that you seek out the advice of an experienced attorney before proceeding. For more information about same-sex marriage, divorce, dissolution, alimony, equitable distribution or other family law matters in New Jersey visit HeatherDarlingLawyer.com. This blog is for informational purposes and in no way intended to replace the advice of an attorney