Cuomo and U.S. Supreme Court Rule So
On July 23, 2013, Governor Andrew Cuomo stated that same-sex spouses who were forced to pay high New York estates when their partner died can now get refunds from the state if they filed amended estate tax returns.
The refunds are possible because of the June Supreme Court ruling that struck down Section 3 of the Defense of Marriage Act (DOMA). Because the Court declared that section unconstitutional, it granted the same rights to gay couples as heterosexual couples in terms of assets and lower tax costs under estate tax laws.
U.S. v. Windsor
The court decision came after Edie Windsor sued the Internal Revenue Service because, in her determined mind, it denied certain rights to same-sex couples that it granted to other wedded couples. Because of DOMA, the federal government did not recognize Edie Windsor’s same-sex legal marriage to Thea Spyer, her partner of forty years, in New York. When Spyer died in 2009, Edie was hit with a bill for $363,000 in federal estate taxes and more than $200,000 in state taxes. She paid the tax and then sued to get it back (U.S. v. Windsor).
The state of New York did recognize Windsor’s marriage. Same-sex marriages, under The Marriage Equality Act, were legal when Spyer died. Signed into law in June 2011, gay marriage become legalized and a month later the IRS department extended equal rights under the estate tax law to legally married gay couples, even those married in other states before New York legalized gay marriage. However, the state could not extend the rights retroactively because of DOMA. The Supreme Court’s DOMA ruling changed that issue.
Happy Ending for Windsor and Countless Others
Windsor now has the same tax breaks as a married taxpayer, and is now due a tax refund from the IRS plus interest because she was forced to pay as a “single” taxpayer. She is hoping to receive a sizable refund from the state as well.
Filing for Refunds
Total amount of taxes that will be refunded? New York has no estimate.
A claim for refund of an estate tax, in general, must be filed by a taxpayer within three years from the date the original return was filed or two years from the date the tax was paid.
The I.R.S. has said “we are reviewing the important June 26 Supreme Court decision on the Defense of Marriage Act. We will be working with The Department of Treasury and Department of Justice, and we will move swiftly to provide revised guidance in the near future.”
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